Law on Bankruptcy and Rehabilitation of Vietnam 2025

 

LAW

BANKRUPTCY AND REHABILITATION

Pursuant to the Constitution of the Socialist Republic of Vietnam amended by Resolution No. 203/2025/QH15;

The National Assembly promulgates the Law on Bankruptcy and Rehabilitation.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Law prescribes principles and procedures for settlement of bankruptcy and rehabilitation cases involved in enterprises, cooperatives, and cooperative unions (hereinafter referred to as “cooperatives”); tasks and powers of persons implementing bankruptcy and rehabilitation procedures; and rights and obligations of persons participating in such procedures.

Article 2. Application of law

The Law on Bankruptcy and Rehabilitation applies to settlement of bankruptcy and rehabilitation cases involved in enterprises and cooperatives; in case this Law does not contain regulations, regulations of relevant laws shall apply. Regulations on rehabilitation procedures and simplified rehabilitation procedures of this Law do not apply to credit institutions, insurers and reinsurers.

Article 3. Basic principles

1. Prioritize application of rehabilitation procedures to enterprises and cooperatives

2. Ensure that bankruptcy and rehabilitation procedures are prompt and effective; harmonize interests, and optimize the value of asset owned by enterprises and cooperatives.

3. Be public and transparent, unless otherwise prescribed by the law.

Article 4. State’s policies on bankruptcy and rehabilitation of enterprises and cooperatives

1. The State shall issue policies on tax, fees, credit, interest rates, land, technology, digital transformation and take other assistance measures applied to enterprises and cooperatives facing business difficulties to follow bankruptcy and rehabilitation procedures for the purposes of orderly restructuring, resumption or termination of business operations, thereby contributing to improvement of investment and business environment and promotion of a healthy economy

2. On the basis of the State’s capacity to balance resources in each period, the Government shall request a competent authority to promulgate, or promulgate within its jurisdiction, specific mechanisms and policies to provide assistance for or promptly remove difficulties and obstacles from enterprises and cooperatives during the bankruptcy and rehabilitation process.

Article 5. Definition of terms

In this Law, the terms below are construed as follows:

1. Enterprise/cooperative likely to lose solvency refers to an enterprise/cooperative that cannot pay a debt that is due in 06 months or debt that has been overdue for less than 06 months.

2. Enterprise/cooperative insolvent refers to an enterprise/cooperative that fails to fulfill its obligation to pay a debt within 06 months as it becomes due.

3. Rehabilitation refers to status of an enterprise/cooperative that is no longer likely to lose solvency and has received a Court’s decision to terminate rehabilitation procedures, or is not insolvent and has received a Court’s decision to terminate rehabilitation procedures.

4. Bankruptcy refers to status of an enterprise/cooperative that is insolvent and has received a Court’s decision declaring bankruptcy.

5. Creditor refers to an individual/agency/organization entitled to request an enterprise/cooperative to fulfill its obligation to pay debt. Creditors include unsecured creditors, partially secured creditors and secured creditors.

6. Unsecured creditor refers to an individual/agency/organization entitled to request an enterprise or cooperative to fulfill its obligation to pay debt that is not secured by the asset owned by such enterprise, cooperative, or a third party.

7. Secured creditor refers to an individual/agency/organization entitled to request an enterprise or cooperative to fulfill its obligation to pay debt that is secured by the asset owned by such enterprise, cooperative, or a third party.

8. Partially secured creditor refers to an individual/agency/organization entitled to request an enterprise or cooperative to fulfill its obligation to pay debt that is secured by the asset owned by such enterprise, cooperative, or a third party and the collateral’s value is lower than the debt to be paid by the enterprise/cooperative.

9. Asset management officer refers to an individual practicing management and liquidation of asset owned by an enterprise/cooperative during the process of settlement of bankruptcy/ rehabilitation case.

10. Asset management and liquidation enterprise refers to an enterprise practicing management and liquidation of asset owned by an enterprise/cooperative during the process of settlement of bankruptcy/ rehabilitation case.

11. Persons implementing bankruptcy and rehabilitation procedures include Chief Justice, Judges, and Court Clerks; the Procurator General and Procurators; asset management officers and asset management and liquidation enterprises; heads of civil judgment-enforcing agencies, enforcers, and other competent persons as prescribed by laws during the process of settlement of bankruptcy/ rehabilitation case.

12. Persons participating in bankruptcy and rehabilitation procedures (hereinafter referred to as “participants”) include creditors; employees; enterprises and cooperatives; shareholders or groups of shareholders of joint-stock companies; members or groups of members of limited liability companies; members of partnerships; owners of sole proprietorships; members of cooperatives or member cooperatives of cooperative unions; debtors of enterprises or cooperatives, and other persons with related rights and obligations during the process of settlement of bankruptcy/ rehabilitation case.

13. Bankruptcy/rehabilitation fee refers to an amount to be paid by a requester for application of bankruptcy and rehabilitation procedures for a Court to accept a written petition.

14. Bankruptcy/rehabilitation costs refer to amounts to be paid for settlement of bankruptcy/rehabilitation cases, including payment to asset management officers, asset management and liquidation enterprises, audit costs, costs for enforcement of court decisions, and other necessary and reasonable costs payable for implementation of bankruptcy and rehabilitation procedures.

15. Payment to an asset management officer or asset management and liquidation enterprise refers to payment for settlement of bankruptcy/rehabilitation case to the asset management officer or asset management and liquidation enterprise.

16. Bankruptcy/rehabilitation advance refers to an amount estimated by a Judge to cover costs during the course of implementation of bankruptcy/rehabilitation procedures.

17. Rehabilitation and bankruptcy cases include requests for application of bankruptcy/rehabilitation procedures; assistance in foreign bankruptcy/rehabilitation cases; and recognition and permission for enforcement of judgments or decisions on bankruptcy/rehabilitation issued by courts or foreign competent authorities in accordance with regulations of this Law.

18. Unpaid premiums of compulsory social insurance, unemployment insurance, health insurance, and occupational accident and disease insurance refer to late payment or evasion of compulsory social insurance, unemployment insurance, health insurance, and occupational accident and disease insurance in accordance with regulations of law

Article 6. Jurisdiction to settle bankruptcy/rehabilitation cases

1. Regional People’s Courts have the jurisdiction to settle bankruptcy/rehabilitation cases within their territorial jurisdiction.

Regional People’s Courts’ territorial jurisdiction over bankruptcy/rehabilitation cases shall be prescribed by the National Assembly Standing Committee.

2. Each regional People’s Court’s jurisdiction shall be determined as follows:

a) The People’s Court of the region where an enterprise or cooperative is headquartered has the jurisdiction to process to the petition for application of bankruptcy/rehabilitation procedures to such enterprise or cooperative;

b) The People’s Court of the region where the judgment debtor resides, works, or is headquartered, or where the asset related to the enforcement of a judgment/decision on bankruptcy/rehabilitation exists, has the jurisdiction to process request for recognition and permission for enforcement of judgment/decision on bankruptcy/rehabilitation issued by a court or foreign competent authority;

c) The People’s Court of the region where the person/organization related to a request for assistance in a foreign rehabilitation or bankruptcy case resides, works, or is headquartered, or where the asset related to such request exists, has jurisdiction to process the request for assistance in the foreign rehabilitation or bankruptcy case.

3. Provincial People’s Courts have the jurisdiction to process requests for review and implement protests against decisions to declare enterprises or cooperatives are bankrupt; and decisions on recognition and enforcement of judgments or decisions on rehabilitation or bankruptcy issued by Courts or foreign competent authorities of regional People’s Courts within their territorial jurisdiction

4. The Supreme People’s Court has the jurisdiction to:

a) Review decisions to process written requests for review and decisions to implement protests against decisions declaring that enterprises or cooperatives are bankrupt, issued by provincial People’s Courts in accordance with clause 4 Article 67 of this Law;

b) Resolve disputes over the jurisdiction of regional People’s Courts.

Article 7. Tasks and powers of Judges upon settlement of bankruptcy/rehabilitation cases

1. Provide guidance for and request participants to collect and submit documents and evidence to prove that their requests or petitions are grounded and lawful; inspect and verify the authenticity of such documents and evidence in accordance with regulations of law.

2. Request agencies, organizations and individuals to provide documents and evidence related to bankruptcy/rehabilitation.

3. Decide the application of simplified bankruptcy/rehabilitation procedures.

4. Decide to appoint or replace asset management officers or asset management and liquidation enterprises.

5. Supervise operations conducted by asset management officers or asset management and liquidation enterprises when settling bankruptcy/rehabilitation cases.

6. Decide audits of enterprises or cooperatives where necessary.

7. Decide sale of assets owned by enterprises or cooperatives to cover bankruptcy/rehabilitation costs and preserve such assets.

8. Decide application of provisional emergency measures according to this Law.

9. Apply the residential confinement measure; and request competent authorities to escort representatives of enterprises or cooperatives in accordance with the law.

10. Decide to convene the creditors’ meeting.

11. Decide to recognize or not to recognize resolutions issued by the creditors’ meeting on business rehabilitation plans.

12. Decide to terminate bankruptcy/rehabilitation procedures.

13. Decide to declare that enterprises and cooperatives are bankrupt.

14. Impose administrative penalties for violations; and recommend competent authorities to initiate criminal proceedings in accordance with regulations of law.

15. Apply case laws to settlement of bankruptcy/rehabilitation cases.

16. Conduct mediation for disputes related to the assets owned by enterprises or cooperatives as requested by participants; and decide the recognition of the parties’ agreement.

17. Consider assisting in foreign bankruptcy/rehabilitation cases.

18. Consider processing requests for recognition and permission for enforcement of judgments or decisions on bankruptcy/rehabilitation issued by courts or foreign competent authorities.

19. Perform tasks and powers prescribed by law.

In case a Panel of Judges is established, such Panel shall perform the tasks and exercise the powers of a Judge as prescribed in this Article. The Chief Justice of the Supreme People’s Court shall provide for working regulations applied to the Panel of Judges during the process of settlement of bankruptcy/rehabilitation case.

Article 8. Refusal or replacement of Judges during the process of settlement of bankruptcy/rehabilitation case

1. A Judge must refuse to participate in settlement of a bankruptcy/rehabilitation case or be replaced in the following cases:

a) He/she is simultaneously a participant; or a representative or relative of the participant;

b) He/she has previously participated in the settlement in the capacity as a Procurator, asset management officer, protector of the legitimate rights and interests of a participant, price appraiser, or interpreter in the case;

c) He/she is a member of a Panel of Judges in charge of settlement of the case and is relative of another Judge;

d) A decision declaring bankruptcy has been issued;

dd) There is a clear ground to believe that the Judge may not be impartial or objective while performing his/her tasks.

2. The replacement of a Judge shall be decided by the Chief Justice of the Court. In case the Judge in charge of the bankruptcy/rehabilitation case is the Chief Justice, the replacement shall be decided by the Chief Justice of the directly superior People’s Court. The Judge replacement decision shall be final decision.

Article 9. Individuals and enterprises practicing management and liquidation of assets

1. Individuals and enterprises allowed to practice management and liquidation of assets during settlement of bankruptcy/rehabilitation cases include:

a) Asset management officers;

b) Asset management and liquidation enterprises.

2. The Government shall elaborate standards and conditions for practicing, issuance and revocation of practicing certificates to/from asset management officers and asset management and liquidation enterprises; and state management of asset management officers and asset management and liquidation enterprises, and asset management and liquidation practicing.

3. Establishment and operation of socio-professional organizations by asset management officers and asset management and liquidation enterprises shall comply with regulations of law.

Article 10. Tasks and powers of asset management officers or asset management and liquidation enterprises

1. Tasks and powers of asset management officers or asset management and liquidation enterprises during rehabilitation procedures:

a) Verify, collect, and manage documents and evidence related to operations conducted by enterprises or cooperatives; and request Judges to implement measures for examination and verification of such documents and evidence;

b) Verify and update the list of creditors and the list of debtors;

c) Conduct mediation in accordance with this Law;

d) Supervise business operations conducted by enterprises or cooperatives; supervise finalization and implementation of business rehabilitation plans by enterprises or cooperatives; preside over the creditors’ meeting as decided by Judges; and transfer enterprises or cooperatives in accordance with resolutions issued by the creditors’ meeting;

dd) Optimize the value of assets owned by enterprises or cooperatives when selling assets; prevent the sale or transfer of assets without Judges’ permission; and prevent the dispersal of assets.

e) Request Courts to declare transactions null and void and decide the recovery of enterprises’/cooperatives’ assets that were illegally sold or transferred; request Courts to impose administrative penalties for violations; and request Courts to recommend competent authorities to initiate criminal proceedings in accordance with regulations of law;

g) Hire organizations and individuals to perform the tasks as prescribed by law;

h) Be entitled to remuneration and professional liability insurance in accordance with regulations of law;

i) Report on the performance of their tasks and powers as requested by Judges; and be held responsible to Judges and the law for the performance of such tasks and powers.

2. Tasks and powers of asset management officers or asset management and liquidation enterprises during bankruptcy procedures:

a) Perform the tasks and powers specified at points a, c, d, e, g and h clause 1 of this Article;

b) Compile the list of creditors and the list of debtors;

c) Optimize the value of assets owned by enterprises or cooperatives when selling or liquidating assets; liquidate assets owned by enterprises or cooperatives; prevent the sale or transfer of assets without Judges’ permission; and prevent the dispersal of assets. All collected amounts must be deposited into an account designated by the Court or the civil judgment-enforcing agency;

d) Request Judges to apply the provisional emergency measures;

dd) Recommend Judges for sale of assets owned by enterprises or cooperatives to cover bankruptcy costs and preserve such assets; sell assets as decided by Judges;

e) Verify capability of executing bankruptcy declaration decisions; organize enforcement of bankruptcy declaration decisions in accordance with regulations of this Law, unless otherwise provided by law; send reports to civil judgment-enforcing agencies and notify participants in bankruptcy procedures related to enforcement of bankruptcy declaration decisions;

g) Request civil judgment-enforcing agencies to take coercive measures to recover and transfer assets as per law;

h) Act as representatives of enterprises or cooperatives to resolution of disputes related to enterprises or cooperatives and recovery of assets from debtors; and in case enterprises or cooperatives have no legal representatives;

i) Report on the performance of their tasks and powers as requested by Judges and civil judgment-enforcing agencies; and be held responsible to Judges, civil judgment-enforcing agencies and the law for the performance of such tasks and powers.

3. Perform other tasks and powers prescribed by law or as decided by Judges.

Article 11. Appointment or replacement of asset management officers or asset management and liquidation enterprises

1. Within 03 working days from the date of acceptance of a written petition for application of bankruptcy/ rehabilitation procedures, a Judge may, on his/her own initiative or as proposed by an enterprise, cooperative, or petitioner, appoint an asset management officer or an asset management and liquidation enterprise when there is any of the following grounds:

a) The asset management officer or asset management and liquidation enterprise does not have any interest related to the bankruptcy/ rehabilitation case;

b) Nature of the bankruptcy/ rehabilitation case; expertise, capacity and experience of the asset management officer or an asset management and liquidation enterprise;

c) The asset management officer or asset management and liquidation enterprise is not a relative of any participant.

2. The asset management officer or asset management and liquidation enterprise must refuse to participate in the bankruptcy/ rehabilitation case or is replaced in the following cases:

a) The asset management officer or asset management and liquidation enterprise has interests related to the bankruptcy/ rehabilitation case;

b) The asset management officer is a relative of the legal representative of the enterprise/cooperative;

c) The asset management officer is simultaneously a participant; or a representative or protector of legitimate rights and interests of the participant;

d) There is any ground to believe that the asset management officer or the asset management and liquidation enterprise fails or is unable to perform their tasks and powers, or is not impartial and objective while performing their tasks;

dd) In force majeure cases where the asset management officer or the asset management and liquidation enterprise is unable to perform their tasks.

Article 12. Tasks and powers of civil judgment-enforcing agencies

1. Enforce decisions on application of provisional emergency measures, decisions to declare transactions null and void, and other decisions in accordance with this Law.

2. Issue decisions on enforcement of decisions declaring enterprises or cooperatives bankrupt, and request asset management officers or asset management and liquidation enterprises to organize enforcement thereof.

3. Apply coercive measures to recover and transfer assets as requested by asset management officers or asset management and liquidation enterprises in the cases provided for in clause 4, Article 76 of this Law.

4. Supervise operations conducted by asset management officers or asset management and liquidation enterprises upon enforcement of decisions declaring enterprises or cooperatives bankrupt; request asset management officers or asset management and liquidation enterprises to report on enforcement of decisions declaring enterprises or cooperatives bankrupt.

5. Recommend Courts to replace asset management officers or asset management and liquidation enterprises during the liquidation of assets owned by bankrupt enterprises or cooperatives in accordance with clause 2, Article 11 of this Law.

6. Distribute assets owned by enterprises and cooperatives as decided by Courts.

7. Decide to stop enforcing decisions to declare that enterprises and cooperatives are bankrupt.

8. Perform tasks and powers prescribed by law.

Article 13. Rights and obligations of participants

1. Process requests from Judges, asset management officers, asset management and liquidation enterprises, and civil judgment-enforcing agencies in accordance with regulations of the law on bankruptcy and rehabilitation.

2. Provide and submit documents and evidence related to settlement of bankruptcy/rehabilitation cases.

3. Request agencies, organizations and individuals currently storing and managing documents and evidence to provide documents and evidence related to their legitimate rights and interests to submit them to Courts.

4. Request Courts to assist in collecting documents and evidence in case where necessary measures have been taken but such documents and evidence cannot be collected.

5. Request Judges, asset management officers, or asset management and liquidation enterprises to solicit assessment, determine prices, or organize pricing; request Judges to decide audits of enterprises or cooperatives; and request Judges to summon witnesses.

6. Be entitled to access, record and photocopy documents and evidence presented by participants or collected by asset management officers or asset management and liquidation enterprises, except for documents and evidence related to state secrets, professional secrets, business secrets, personal secrets, or family secrets as legitimately requested by participants.

7. Propose application, change or cancellation of provisional emergency measures.

8. Receive valid documents and notification for the exercise of their rights and obligations.

9. Protect by themselves or authorize other persons to protect their legitimate rights and interests.

10. Participate in the creditors’ meeting.

11. Propose appointment or replacement of asset management officers or asset management and liquidation enterprises as prescribed in Article 11 of this Law.

12. Request asset management officers or asset management and liquidation enterprises to include creditors and debtors on the list of creditors and the list of debtors respectively.

13. Recommend asset management officers or asset management and liquidation enterprises for recovery of amounts and assets from debtors.

14. Be present as requested by asset management officer and asset management and liquidation enterprises, or according to written summons sent by Courts, and abide by Courts’ decisions during settlement of bankruptcy and rehabilitation cases.

15. Participate in management and liquidation of assets as requested by Judges, asset management officers, asset management and liquidation enterprises, and civil judgment-enforcing agencies during settlement of bankruptcy and rehabilitation cases.

16. Propose review of Courts’ decisions as per this Law.

17. Request Courts to apply simplified bankruptcy/rehabilitation procedures.

18. Have goodwill and honesty, and respect commitments and agreements.

19. Refrain from committing acts aimed at concealing or dispersing the assets owned enterprises or cooperatives; and abusing bankruptcy/rehabilitation procedures to infringe upon the legitimate rights and interests of the State, agencies, organizations, or individuals.

20. In case a participant dies, his/her lawful heirs shall exercise the rights and fulfill obligations in accordance with this Article.

21. Other rights and obligations prescribed by law.

Article 14. Creditor representative board

1. After acceptance of a written petition for application of rehabilitation procedures or initiation of bankruptcy procedures, the Court may decide to establish a creditor representative board, except for cases that are settled according to simplified procedures.

The creditor representiave board consists of no more than 05 members, including major creditors (to whom large amounts of money are owed) and creditors acting as representatives of groups of major creditors of enterprises/cooperatives.

2. Rights and obligations of the creditor representative board:

a) Present opinions on a business rehabilitation plan prepared by an enterprise/cooperative;

b) Request the asset management officer or the asset management and liquidation enterprise to inspect the financial situation of the enterprise or cooperative after the business rehabilitation plan has been recognized.

c) Make a proposal to photocopy documents and evidence related to bankruptcy/rehabilitation, except for documents and evidence related to state secrets, professional secrets, business secrets, personal secrets, or family secrets as legitimately requested by participants;

d) Appoint members of the creditor representative board to act as supervisors after the Court gives permission;

dd) On behalf of creditors, supervise operations conducted by the enterprise or cooperative in accordance with regulations of this Law;

e) Other rights and obligations as decided by the Judge or the creditors’ meeting.

3. The Supreme People’s Court shall elaborate and provide guidance on clause 1 of this Article.

Article 15. Responsibilities and obligations of agencies, organizations and individuals related to bankruptcy and rehabilitation cases

1. Agencies, organizations and individuals currently managing or storing documents and evidence related to bankruptcy and rehabilitation cases shall be responsible for fully and promptly providing such documents and evidence within 10 days from the date of receipt of requests from creditors, enterprises, cooperatives, Courts, Procuracies, asset management officers, or asset management and liquidation enterprises. In case where documents and evidence cannot be provided, written responses clearly stating reasons must be issued.

Tax authorities, business registration agencies, and social security authorities shall be responsible for providing information on debt status, legal status, and other information about enterprises or cooperatives during settlement of bankruptcy and rehabilitation cases within 03 working days from the date of receipt of requests from Courts.

2. From the date on which Courts accept written petitions for application of rehabilitation procedures, and decisions to initiate bankruptcy procedures, employees, and relevant agencies, organizations, or individuals are prohibited from committing any acts aimed at concealing or dispersing assets, documents, and evidence provided by enterprises/cooperatives.

3. From the date of receipt of Courts’ decisions declaring enterprises or cooperatives bankrupt, credit institutions where bankrupt enterprises or cooperatives maintain their accounts are strictly prohibited from making payments for debts incurred by such bankrupt enterprises or cooperatives, unless Courts or civil judgment-enforcing agencies give their written permission.

4. Relevant agencies, organizations and individuals are responsible for implementing requests and proposals from Courts and closely and promptly cooperating with Courts during settlement of bankruptcy and rehabilitation cases.

Agencies, organizations and individuals that fail to implement Courts’ requests without legitimate reasons shall, depending on the nature and severity of their violations, face penalties in accordance with the law.

Article 16. Inspection and supervision of compliance with laws during the process of settlement of bankruptcy/rehabilitation cases

1. Procuracies shall supervise and inspect compliance with laws on settlement of bankruptcy/rehabilitation cases, and exercise of the rights to petition, recommendation and protest according to regulations of this Law.

2. Procuracies shall participate in meetings for resolution of disputes and review of protests; and supervise and inspect Courts’ decisions on settlement of bankruptcy/rehabilitation cases in accordance with this Law.

Article 17. Issuing, sending and notifying documents on bankruptcy/rehabilitation cases

1. Persons implementing bankruptcy and rehabilitation procedures and competent persons shall issue, send and notify documents to participants in accordance with regulations of this Law, the civil procedure law, and the law on electronic transactions.

2. Documents on settlement of bankruptcy/rehabilitation cases may be issued, sent or notified by the following methods:

a) In person;

b) By post

c) Online;

d) Mass media;

dd) By a person authorized to issue, send or notify documents;

e) Other methods prescribed by law.

3. Participants may select and request persons implementing bankruptcy and rehabilitation procedures to issue, send, notify or submit documents to them by the methods provided for in clause 2 of this Article.

4. If persons implementing bankruptcy and rehabilitation procedures or competent persons have completely issued, sent and notified documents by the methods specified in clause 2 of this Article, such actions shall be considered valid,

Article 18. Entrustment during settlement of bankruptcy/rehabilitation cases

1. The Court currently settling the bankruptcy/rehabilitation case may decide to entrust another Court to recover assets, take statements from participants, conduct on-site appraisal, determine prices of assets, or take other measures to assist in collecting, examining, and verifying documents and evidence related to the case.

2. The entrustment decision must include information on participants related to entrustment, entrustment content, scope of entrustment, and time limit for entrustment.

3. The Court receiving the entrustment decision shall be responsible for execution of the decision and must provide a written notification of the result to the Court that has issued the entrustment decision.

Article 19. Bankruptcy/rehabilitation fee

Persons submitting written petitions for application of bankruptcy/rehabilitation procedures (petitioners) shall pay bankruptcy/rehabilitation fees in accordance with the law on court fees and charges and as notified by Courts. The petitioners specified in point b, clause 1, clause 3, and clause 4 of Article 38 and point c, clause 1 of Article 70 of this Law are not required to pay bankruptcy/rehabilitation fees.

Article 20. Bankruptcy/rehabilitation costs; bankruptcy/rehabilitation advance

1. Bankruptcy/rehabilitation costs are covered by the value of assets owned by enterprises/cooperatives. In case where a person submitting written petition for application of bankruptcy/rehabilitation procedures (petitioner) is dishonest or abuses such procedures to infringe upon the legitimate rights and interests of the agency/organization/individual, he/she shall bear the bankruptcy/rehabilitation costs.

2. Persons submitting written petitions for application of bankruptcy/rehabilitation procedures (petitioners) shall advance bankruptcy/rehabilitation costs, except for the petitioners specified in point b clause 1, clause 3 and clause 4 Article 38 and point c clause 1 Article 70 of this Law.

3. The state budget shall cover advances in the cases specified in point b clause 1, clause 3 and clause 4 Article 38 and point c clause 1 Article 70 of this Law.

4. The Judge shall decide the bankruptcy/rehabilitation advance; the bankruptcy/rehabilitation advance in each specific case in accordance with the law; and decide to refund the bankruptcy/rehabilitation advance, except where the petitioner is dishonest or abuses procedures to infringe upon the legitimate rights and interests of the agency/organization/individual, he/she shall bear the bankruptcy/rehabilitation cost, or where the enterprise or cooperative no longer has amounts or assets.

5. The Judge shall assign an asset management officer or asset management and liquidation enterprise to sell some assets owned by the enterprise or cooperative to cover bankruptcy/rehabilitation costs. Bankruptcy advance specified in clause 3 of this Article shall be refunded to state budget.

If the enterprise or cooperative no longer has amounts or assets, the bankruptcy cost shall be covered by state budget.

Determination, re-determination of prices of and sale of assets shall comply with regulations in Article 77 of this Law.

6. Funding for bankruptcy advance and cost as provided for in clauses 3 and 5 of this Article shall be included in the annual state budget estimate made by the Court. Estimation, management, use, advance, and payment of such funding shall comply with the law on state budget and the law on procedural costs.

7. Bankruptcy/rehabilitation advances paid by petitioners, or proceeds from the sale of assets owned by enterprises/cooperatives, shall be deposited into bank accounts designated by Courts or civil judgment-enforcing agency to cover bankruptcy/rehabilitation costs.

Article 21. Payment to asset management officer or asset management and liquidation enterprise in bankruptcy/rehabilitation case

1. Payment to an asset management officer or asset management and liquidation enterprise shall be calculated based on the time, effort, and result of their performance of tasks.

2. The Government shall elaborate this Article.

Article 22. Negotiation and mediation

1. Enterprises, cooperatives, creditors, and other participants are encouraged to conduct negotiation and mediation during settlement of bankruptcy/rehabilitation cases.

2. The asset management officer or asset management and liquidation enterprise shall be responsible for conducting mediation at the request of the enterprise, cooperative, creditor, or participant.

3. The Judge shall be responsible for conducting mediation of disputes related to the assets owned by the enterprise or cooperative during bankruptcy procedures at the request of any participant therein. In case where the parties reach an agreement on the settlement of the dispute, the Judge shall prepare a record of successful mediation and issue a decision to recognize the agreement.

4. The Supreme People’s Court shall elaborate and provide guidance on clauses 2 and 3 of this Article.

Article 23. Online settlement of bankruptcy/rehabilitation cases

1. During settlement of a bankruptcy/rehabilitation case, the following procedures may be followed online:

a) Issuing, sending and notifying documents;

b) Submitting a written petition for application of bankruptcy/rehabilitation procedures;

c) Paying bankruptcy/rehabilitation cost, advance and fee;

d) Providing and submitting documents and evidences;

dd) Holding a meeting to settle the bankruptcy/rehabilitation case;

e) Selling assets and transfer the enterprise/cooperative;

g) Conducting other operations in compliance with the law.

2. Online settlement of bankruptcy/rehabilitation cases shall comply with regulations of the law and guidelines given by the Supreme People’s Court.

3. The Supreme People’s Court shall elaborate and provide guidance on this Article.

Chapter II

REHABILITATION PROCEDURES

Section 1. ACCEPTANCE OF WRITTEN PETITIONS

Article 24. Persons entitled to submit written petitions for application of rehabilitation procedures

1. A person entitled to submit a written petition for application of rehabilitation procedures when an enterprise/cooperative is likely to lose solvency or insolvent includes:

a) Legal representative of the enterprise/cooperative;

b) Board of Directors of a joint-stock company, Board of Members of a limited liability company with two or more members, the Board of Members of a partnership;

c) General Meeting of Members of a cooperative;

d) Owner of a sole proprietorship, owner of a single-member limited liability company.

2. The Supreme People’s Court shall elaborate and provide guidance on this Article.

Article 25. Processing and acceptance of written petitions for application of rehabilitation procedures

1. A person submitting a written petition for application of rehabilitation procedures (petitioner) shall submit a business rehabilitation plan, lists of creditors and debtors, and documents and evidence to prove that the petition is well-founded and lawful, to a competent Court as stipulated in Article 6 of this Law.

The petitioner is responsible for the accuracy of information on lists of creditors and debtors.

2. Within 03 working days from the date of receipt of the written petition, the Court’s Chief Justice shall assign a Judge or a panel of Judges to process the written petition. Within 12 days from the date of assignment, the Judge must review and process the written petition as follows:

a) Notification of payment of bankruptcy/rehabilitation fee and advance;

b) Notification of revision to the written petition;

c) Notification of transfer of the written petition to the competent Court;

d) Notification of return of the written petition in the case specified in clause 3 of this Article.

3. The written petition shall be returned from the Court in the following cases:

a) The petitioner is not entitled to submit the written petition as specified in Article 24 of this Law;

b) The petitioner fails to revise the written petition in accordance with point b clause 2 of this Article by the prescribed deadline;

c) The petitioner withdraws the written petition;

d) The petitioner fails to pay rehabilitation fee/advance;

dd) The petitioner is not honest when petitioning application of rehabilitation procedures;

e) Another Court has accepted the written petition for application of bankruptcy/rehabilitation procedures.

A notification of return of the written petition for application of rehabilitation procedures according to this clause must clearly state the reasons for such return. Within 03 working days from the date of notification, the Court shall be responsible for sending this notification to the petitioner and the People’s Procuracy.

4. Within 03 working days from the date of receipt of the notification of return, the petitioner is entitled to request review, and the People’s Procuracy is entitled to recommend the Court’s Chief Justice that has issued the notification to return the written petition.

Within 03 working days from the date of receipt of the written request for review/recommendation for the notification of the return of the written petition for application of rehabilitation procedures, the Court’s Chief Justice that has issued the notification of return of the written petition shall issue one of the following decisions:

a) Uphold the notification of return of the written petition;

b) Annul the notification of return of the written petition and accept the written petition according to this Law.

The decision issued by the Court’s Chief Justice that has issued the notification of return of the written petition shall be final decision. Within 03 working days from the date of issuance, this decision must be sent to the petitioner and the People’s Procuracy that has given the recommendation.

5. The Court accepts the written petition when the enterprise/cooperative has paid rehabilitation fee/advance.

If necessary, prior to the acceptance of the written petition, the Judge may convene a meeting with the participation of the petitioner and relevant agencies, organizations, and individuals to review and verify the grounds for the petition for application of rehabilitation procedures.

6. The notification of acceptance of the written petition must be in writing, sent to the petitioner, the People’s Procuracy, the civil judgment-enforcing agency, and relevant agencies, organizations, and individuals, and posted on the national e-portal on bankruptcy and rehabilitation of enterprises/cooperatives within 03 working days from the date of acceptance of the written petition.

7. The Supreme People’s Court shall elaborate and provide guidance on this Article.

Article 26. Verification of lists of creditors and debtors

1. Asset management officers and asset management and liquidation enterprises shall inspect, consolidate, review, and verify lists of creditors and debtors, and report them to the Judge.

2. If necessary, the Court shall convene participants in rehabilitation procedures to verify lists of creditors and debtors or request the enterprise/cooperative to revise such lists.

Article 27. Suspension and temporary cessation of response to requests for enterprises’/cooperatives’ fulfillment of financial obligations

Within 05 working days from the date of receipt of the Court’s notification of the acceptance of the written petition for application of rehabilitation procedures, suspension and temporary cessation of an enterprise’s/cooperative’s fulfillment of the financial obligation shall be prescribed as follows:

1. The civil judgment-enforcing agency shall suspend enforcement of a civil financial judgment under which the enterprise/cooperative is the judgment debtor, except for the following judgments and decisions:

a) Judgment/decision under which the enterprise/cooperative is forced to pay compensation for loss of life, health, or honor, give severance pays, or pay salaries to its employees;

b) Decision to distrain the asset owned by the enterprise or cooperative for confiscation;

c) Judgment/decision under which the enterprise/cooperative is forced to perform its obligations secured by the asset owned by the third party;

d) Other cases prescribed by law.

The suspension shall comply with regulations of the law on enforcement of civil judgments. The civil judgment-enforcing agency shall immediately notify the Court currently implementing rehabilitation procedures of the result of enforcement of the judgment/decision specified in this clause, so that the Court can identify the obligation to the asset owned by the enterprise/cooperative and update the lists of creditors and debtors;

2. Other competent agencies and organizations, as prescribed by law, shall temporarily cease handling the enterprise’s/cooperative’s collateral for the secured creditor, unless otherwise provided for by law.

The Government shall elaborate this clause;

3. In case where the collateral is used to implement the business rehabilitation plan, the time limit for handling the asset shall comply with the resolution issued by the creditors’ meeting. In case where the collateral is not used to implement the business rehabilitation plan, the asset shall be handled within the time limit specified in the contract. The asset shall be handled in accordance with regulations of clause 2 and clause 3, Article 44 of this Law;

4. Competent agencies and organizations, as prescribed by law, shall temporarily cease taking coercive measures to recover debt, and other measures intended to force the enterprise/cooperative to fulfill the obligation to its asset.

Section 2. ACTIVITIES/OPERATIONS CONDUCTED BY ENTERPRISES/COOPERATIVES AFTER COURTS ACCEPT WRITTEN PETITIONS

Article 28. Business rehabilitation plan

1. The business rehabilitation plan prepared by the enterprise/cooperative must clearly state business rehabilitation measures that are not contrary to regulations of law; conditions, time limit, and debt repayment plan.

2. The following debts shall be paid in the descending order of priority:

a) Rehabilitation cost;

b) Unpaid salaries and unpaid premiums of compulsory social insurance, unemployment insurance, health insurance, and occupational accident and disease insurance; severance allowances and other benefits of employees according to the collective bargaining agreement and the signed labor contracts;

c) Debts incurred for rehabilitation of the enterprise’s/cooperative’s business;

d) Secured debts;

dd) Other debts.

3. Within 30 days from the date of acceptance of the written petition for application of rehabilitation procedures, the enterprise/cooperative shall complete the business rehabilitation plan to be reported by the asset management officer or asset management and liquidation enterprise to the Judge.

Article 29. Time limit for implementation of business rehabilitation plan

1. The time limit for implementation of the business rehabilitation plan prepared by the enterprise/cooperative shall comply with the resolution issued by the creditors’ meeting on approval of the business rehabilitation plan.

2. If the creditors’ meeting cannot determine the time limit, the time limit shall not exceed 03 years from the date on which the creditors’ meeting approves the business rehabilitation plan.

3. The time limit for the State to provide assistance for the enterprise/cooperative upon rehabilitation shall be the same as the time limit for implementation of the business rehabilitation plan and this time limit shall not exceed 03 years from the date on which the creditors’ meeting approves the business rehabilitation plan, except for the cases stipulated in clause 3, Article 30 of this Law and as otherwise provided for by law.

Article 30. Enterprises’/cooperatives’ business after courts accept written petitions

1. After the Court accepts the written petition, the enterprise/cooperative shall continue its business operations, but is supervised by the asset management officer, the asset management and liquidation enterprise, and the creditor representative board.

2. In case where the legal representative of the enterprise/cooperative is deemed incapable of management, or if the enterprise/cooperative shows any sign of violation against regulations of Article 31 of this Law, the Judge may, as requested by the creditor representative board, the asset management officer, the asset management and liquidation enterprise, the persons specified in points b, c, and d, clause 1, Article 24 of this Law, or the creditors’ meeting, or when deemed necessary consider deciding the selection of another person to act as the legal representative of the enterprise/cooperative.

The Government shall prescribe replacement of the legal representative of state-invested enterprise.

3. From the date of acceptance of the written petition for application of rehabilitation procedures, the enterprise/cooperative shall have its tax debt frozen at the request of the Court, and suspend contribution to the pension and survivorship fund. The time limit for freezing tax debt and suspending contribution to the pension and survivorship fund shall comply with laws on tax administration and social insurance.

4. Repayment of debts incurred prior to the acceptance of the written petition for application of rehabilitation procedures shall be suspended from the acceptance until the Court recognizes the business rehabilitation plan or terminates business rehabilitation procedures, except for payment of necessary costs for maintenance of operations of the enterprise/cooperative as decided by the Judge.

5. From the date of acceptance of the written petition, interest shall continue to be charged on the debts but interest payment may be suspended until the Court recognizes the business rehabilitation plan or terminates business rehabilitation procedures, except for the cases stipulated in clause 6 of this Article or as otherwise provided for by law.

6. New debts incurred after the date on which the Court accepts the written petition for the purpose of rehabilitation of the enterprise/cooperative, the interest on such debts shall be determined as agreed in accordance with the law.

7. Synchronous transfer of assets, transfer of a part or the whole of a business segment or business operation, and transfer of a part or the whole of the enterprise or cooperative shall be considered and decided by the creditors’ meeting. Procedures and conditions for the transfer of assets shall comply with the law.

Article 31. Enterprises’/cooperatives’ operations prohibited after Courts accept written petitions

1. After the Court accepts the written petition, the enterprise/cooperative is prohibited from conducting the following operations:

a) Concealing, dispersing, or giving away assets;

b) Waiving the right to recover debts;

c) Paying debts incurred prior to the Court’s acceptance of the written petition;

d) Converting debts unsecured into debts secured or debts partially secured by the assets owned the enterprise or cooperative;

dd) Distributing profits and income.

2. The operations specified in points c, d, and dd, clause 1 of this Article shall be conducted in case where this Law or other laws provide otherwise, or the Judge gives permission.

Article 32. Supervision of operations conducted by enterprises/cooperatives after Courts accept written petitions

1. After the Court accepts the written petition, the enterprise/cooperative shall send a report to the asset management officer, the asset management and liquidation enterprise for supervision before conducting the following operations:

a) Conducting operations related to borrowing; pledge, mortgage, guarantee, and other security measures; purchase, sale, transfer, and lease of assets; sale and transfer of shares or capital contributions; asset ownership transfer;

b) Terminating the effective contract;

c) Paying debts incurred prior to the Court’s acceptance of the written petition; paying salaries to employees working for the enterprise/cooperative;

d) Carrying out other transactions inappropriate to interests of the enterprise/cooperative.

2. The asset management officer, the asset management and liquidation enterprise shall report to the Judge on supervision.

Section 3. THE CREDITORS’ MEETING

Article 33. The creditors’ meeting

1. Within 05 working days from the date of receipt of the business rehabilitation plan, the Judge shall consider deciding to convene a creditors’ meeting to decide the contents specified in points a, b, and c, clause 7 of this Article.

2. The Judge may also convene a creditors’ meeting to consider deciding the following contents:

a) Synchronous transfer of assets, transfer of a part or the whole of a business segment or business operation, and transfer of a part or the whole of the enterprise or cooperative;

b) Proposal for fulfillment of the obligation to the asset owned by the enterprise/cooperative in case of suspension and temporary cessation in accordance with Article 27 of this Law;

c) Other relevant issues.

3. The following persons have the right to participate in the creditors’ meeting:

a) The creditor named in the list of creditors. The creditor may authorize another person in writing to participate in the creditors’ meeting.

The creditor who does not participate in the creditors’ meeting but sends his/her written opinions to the Judge before the date of the meeting shall be deemed to have participated in and voted at the creditors’ meeting;

b) Representatives of employees, trade unions, or employee organizations at the enterprise, authorized by the employees. In this case, the representatives of employees, trade unions, or employee organizations at the enterprise shall have the same rights and obligations as those of creditors.

4. The following persons have the obligation to participate in the creditors’ meeting:

a) The person submitting written petition for application of rehabilitation procedures (petitioner) as stipulated in Article 24 of this Law, and the legal representative of the enterprise or cooperative; in case of inability to participate, he/she must authorize another person in writing to participate in the creditors’ meeting;

b) The asset management officer and asset management and liquidation enterprise.

5. The asset management officer shall chair the creditors’ meeting.

6. A resolution of the creditors’ meeting will be approved when it is voted for by a number of creditors representing at least 65% of the total number of creditors. Such resolution shall be binding on all creditors.

Creditors participating in the creditors’ meeting shall be responsible for the legality of the resolution of such meeting.

7. The creditors’ meeting is entitled to issue a resolution containing one of the following conclusions:

a) Approval of the business rehabilitation plan for the enterprise/cooperative;

b) Petition for termination of rehabilitation procedures;

c) Petition for application of bankruptcy procedures in case the enterprise/cooperative is insolvent, and the obligation to advance bankruptcy cost;

d) The contents specified in clause 2 of this Article.

8. Within 03 working days from the date on which the creditors’ meeting is convened, the Court shall send the creditors’ meeting’s resolution to the Procuracy, persons entitled/obliged to participate in the creditors’ meeting.

Article 34. Consideration and recognition of the creditors’ meeting’s resolution

1. Within 07 days from the date on which the business rehabilitation plan is approved according to the creditors’ meeting’s resolution, the Judge shall issue one of the following decisions:

a) Recognition of the creditors’ meeting’s resolution. The creditors’ meeting’s resolution on approval of the business rehabilitation plan comes into force from the date on which the Judge issues the recognition decision;

b) Non-recognition of the creditors’ meeting’s resolution and termination of rehabilitation procedures in case the resolution on approval of the business rehabilitation plan contains contents against the law.

2. From the effective date of the creditors’ meeting’s resolution on approval of the business rehabilitation plan, the measures to prohibit and supervise the enterprise/cooperative specified in Articles 31 and 32 of this Law shall be automatically terminated.

3. The decision specified in clause 1 of this Article shall be sent to the Procuracy, persons entitled/obliged to participate in the creditors’ meeting within 03 working days from the date of issuance of the decision.

4. Within 05 working days from the date on which the creditors’ meeting approves a resolution on petition for application of bankruptcy procedures according to point c, clause 7, Article 33 of this Law, the Judge shall consider requesting the person obligated to pay the bankruptcy advance to do so, and on a case-by-case basis take actions as follows:

a) In case the bankruptcy advance is not paid, the Judge shall issue a decision to terminate rehabilitation procedures and not to apply bankruptcy procedures, unless the enterprise/cooperative no longer has its asset to pay the advance. In this case, the Court shall issue a decision declaring the enterprise/cooperative bankrupt according to simplified procedures;

b) In case the bankruptcy advance has been paid, the Judge shall issue a decision to terminate rehabilitation procedures and accept the bankruptcy case.

Article 4. IMPLEMENTATION OF BUSINESS REHABILITATION PLAN

Article 35. Supervision of implementation of business rehabilitation plan

1. After the Judge issues a decision to recognize the creditors’ meeting’s resolution on approval of the business rehabilitation plan, the asset management officer, the asset management and liquidation enterprise, the creditor representative board, and the creditor shall supervise the enterprise’s/cooperative’s business.

2. Every 03 months, the enterprise/cooperative shall prepare a report on the implementation of the business rehabilitation plan and submit it to the asset management officer, the asset management and liquidation enterprise, the creditor representative board, and the creditor. The asset management officer and the asset management and liquidation enterprise are responsible for reporting to the Judge.

Article 36. Revisions to business rehabilitation plans

1. During implementation of the business rehabilitation plan, the creditors and the enterprise/cooperative are entitled to agree on revision to the business rehabilitation plan.

2. A resolution on revision to the business rehabilitation plan will be approved when it is voted for by a number of creditors representing at least 65% of the total number of creditors.

3. The asset management officer, the asset management and liquidation enterprise shall send a written request to the Judge for issuance of a decision to recognize the resolution on revision to the business rehabilitation plan. The recognition decision shall be sent to the enterprise/cooperative/creditor/asset management officer within 03 working days from the date of issuance of the decision.

Article 37. Termination of rehabilitation procedures and consequences

1. The Judge shall decide to terminate rehabilitation procedures in one of the following cases:

a) The petitioner withdraws the written petition after the date of acceptance and before the creditors’ meeting approves the business rehabilitation plan;

b) The creditors’ meeting’s resolution is not approved according to regulations in points a,b and c clause 7 Article 33 of this Law;

c) Termination of rehabilitation procedures is proposed according to the creditors’ meeting’s resolution;

d) The Judge does not recognize the creditors’ meeting’s resolution;

dd) The enterprise/cooperative fails to complete or implement the business rehabilitation plan;

e) The time limit for implementation of the business rehabilitation plan has expired but the plan remains uncompleted;

g) The enterprise/cooperative has completed the business rehabilitation plan;

h) The enterprise/cooperative is no longer likely to lose solvency or is no longer insolvent;

i) Other cases prescribed by law.

2. The Court shall send the decision to terminate rehabilitation procedures to participants in rehabilitation procedures, the asset management officer, the asset management and liquidation enterprise, the People’s Procuracy, the civil judgment-enforcing agency, and relevant agencies and organizations within 03 working days from the date of issuance of the decision.

3. Consequences of termination of rehabilitation procedures are prescribed as follows:

a) When the decision to terminate rehabilitation procedures is issued, the tasks and powers of the asset management officer and the asset management and liquidation enterprise shall be terminated; the person who has paid the rehabilitation advance shall be refunded the remaining advance;

b) The measures to prohibit and supervise the enterprise/cooperative specified in Articles 31, 32 and 35 of this Law shall be terminated. In case rehabilitation procedures are terminated in accordance with point b, clause 4, Article 34 of this Law, the measures to prohibit and supervise the enterprise/cooperative shall be implemented in accordance with Article 42 of this Law;

c) In case the fulfillment of the financial obligation is suspended or temporarily ceased, the Court shall notify the civil judgment-enforcing agency or the competent agency/organization that has decided suspension or temporary cessation to issue a decision to resume enforcement or implement measures to force the enterprise/cooperative to fulfill its financial obligation.

d) In case the financial obligation had been fulfilled before it was suspended or temporarily ceased, the Court shall notify the civil judgment-enforcing agency or the competent agency/organization to issue a decision to terminate the judgment enforcement or cease implementing the measures to force the enterprise/cooperative to fulfill its financial obligation.

4. In case rehabilitation procedures are terminated according to point d, clause 1 of this Article, within 10 days from the date of receipt of the decision, the participant in rehabilitation procedures is entitled to request a review and the People’s Procuracy is entitled to protest against the rehabilitation procedure termination decision to the Chief Justice of the Court currently implementing rehabilitation procedures.

5. Within 03 working days from the date of receipt of the request for review and the protest specified in clause 4 of this Article, the Chief Justice of the Court shall conduct review and issue one of the following decisions:

a) Uphold the decision to terminate rehabilitation procedures;

b) Annul the decision to terminate rehabilitation procedures and assign the Judge to continue to implement rehabilitation procedures.

6. Decisions to process request for review and implement protest against decision to terminate rehabilitation procedures shall be sent to the requester, the protester, the enterprise, the cooperative, and other relevant persons within 03 working days from the date of issuance of the decision.

Chapter III

BANKRUPTCY PROCEDURES

Section 1. ACCEPTANCE OF WRITTEN PETITIONS

Article 38. Persons entitled/obliged to submit written petitions for application of bankruptcy procedures

1. A person entitled to submit a written petition for application of bankruptcy procedures when an enterprise or a cooperative is insolvent includes:

a) Unsecured creditor or partially secured creditor;

b) Employee or trade union upon the expiry of 06-month period from the date on which the enterprise or cooperative fails to fulfill its obligation to pay salary and other due debts to the employee;

c) Shareholder or group of shareholders holding at least 20% of ordinary shares unless a smaller percentage is specified in the charter;

d) Member or group of members holding at least 65% of total charter capital of a limited liability company with two or more members unless a smaller percentage is specified in the charter;

dd) A member of a cooperative or the legal representative of a member cooperative of a cooperative union.

2. The following persons are obliged to submit the written petition for application of bankruptcy procedures when an enterprise or a cooperative is insolvent unless they have submitted the written petition for application of rehabilitation procedures:

a) Legal representatives of the enterprises/cooperatives;

b) Board of Directors of a joint-stock company, Board of Members of a limited liability company with two or more members, the Board of Members of a partnership;

c) General Meeting of Members of a cooperative;

d) Owner of a sole proprietorship; owner of a single-member limited liability company.

3. The tax administration authority shall submit a written petition for application of bankruptcy procedures to the enterprise/cooperative in accordance with the Law on Tax Administration.

The Government shall prescribe conditions for submission of written petitions for application of bankruptcy procedures.

4. The social security authority is entitled to submit a written petition for application of bankruptcy procedures to an enterprise/cooperative if the authority has notified late payment or evasion of compulsory social insurance, unemployment insurance or health insurance but has received no response for 03 consecutive years in accordance with the laws on social insurance, unemployment insurance, and health insurance.

5. Individuals, agencies, and organizations as prescribed in clauses 2 and 3 of this Article that fail to submit written petitions for application of bankruptcy procedures shall be held liable to the law. In case the person specified in clause 2 of this Article fails to submit a written petition for application of bankruptcy procedures and damage is caused after the enterprise/cooperative becomes insolvent due to the failure to submit the written petition, such person shall be liable for compensation.

6. The Supreme People’s Court shall elaborate and provide guidance on clause 2 of this Article.

Article 39. Processing and acceptance of written petitions for application of bankruptcy procedures

1. A person entitled/obliged to submit a written petition for application of bankruptcy procedures shall submit the written petition, lists of creditors and debtors (if any), and documents and evidence to prove that the petition is well-founded and lawful, to a competent Court as stipulated in Article 6 of this Law.

2. Within 02 working days from the date of receipt of the written petition from the petitioner specified in Article 38 of this Law, the Court’s Chief Justice shall assign a Judge or a panel of Judges to process the written petition. Within 02 working days from the date of assignment, the Judge shall notify the enterprise/cooperative to which bankruptcy procedures are applied.

Within 05 working days from the date on which the notification is sent, the enterprise/cooperative shall give written opinions on the written petition and the enclosed documents and evidence. Within 07 days from the date on which the notification is sent, the Judge shall consider taking actions as follows:

a) Requesting payment of bankruptcy fee and advance, except for the case where such fee and advance are not required;

b) Requesting revision to the written petition;

c) Transferring the written petition to the competent Court;

d) Returning the written petition in the case specified in clause 3 of this Article.

3. The Court shall decide to return the written petition for application of bankruptcy procedures in the following cases:

a) The petitioner does not have the right/obligation to submit the written petition as specified in Article 38 of this Law;

b) The petitioner fails to revise the written petition in accordance with point b clause 2 of this Article within the prescribed time limit;

c) Another Court has accepted the written petition for application of bankruptcy/rehabilitation procedures;

d) The petitioner withdraws the written petition;

dd) The petitioner fails to pay bankruptcy fee and advance, except for the case where such fee and advance are not required.

A notification of return of the written petition for application of bankruptcy procedures according to this clause must clearly state the reasons for such return. Within 03 working days from the date of notification, the Court shall be responsible for sending this notification to the petitioner and the People’s Procuracy of the same level;

4. Within 03 working days from the date of receipt of the notification of return, the petitioner is entitled to request review, and the People’s Procuracy is entitled to recommend the Court’s Chief Justice that has issued the notification to return the written petition.

Within 03 working days from the date of receipt of the written request for review/recommendation for the notification of the return of the written petition, the Court’s Chief Justice that has issued the notification of return of the written petition shall issue one of the following decisions:

a) Uphold the notification of return of the written petition;

b) Annul the notification of return of the written petition and accept the written petition according to this Law.

The decision issued by the competent Court’s Chief Justice specified in this clause shall be final decision. Within 03 working days from the date of issuance, this decision must be sent to the petitioner and the People’s Procuracy that has given the recommendation.

5. The Court shall accept the written petition when there is a ground to confirm that bankruptcy fee and advance have been paid, except for the case where such fee and advance are not required;

6. The notification of processing and acceptance of the written petition for application of bankruptcy procedures shall be in writing and sent to the petitioner, the enterprise, the cooperative, agencies and organizations currently settling the case related to the enterprise or cooperative, the creditor as provided by the parties, and the People’s Procuracy.

7. In case the Court accepts the bankruptcy case in accordance with clause 4, Article 34 of this Law, the documents and evidence collected during the application of rehabilitation procedures shall be used to implement bankruptcy procedures.

8. The Supreme People’s Court shall elaborate and provide guidance on this Article.

Article 40. Suspension and temporary cessation of response to requests for enterprises’/cooperatives’ fulfillment of financial obligations

Within 05 working days from the date of receipt of the Court’s notification on the acceptance of the written petition for application of bankruptcy procedures, suspension of an enterprise’s/cooperative’s fulfillment of the financial obligation shall be prescribed as follows:

1. The civil judgment-enforcing agency shall suspend enforcement of a civil judgment related to the asset under which the enterprise/cooperative is the judgment debtor, except for the following judgments and decisions:

a) Judgment/decision under which the enterprise/cooperative is forced to pay compensation for loss of life, health, or honor, give severance pays, or pay salaries to its employees;

b) Decision to distrain the asset owned by the enterprise or cooperative for confiscation;

c) Judgment/decision related to a third party’s asset used to secure the obligation of the enterprise/cooperative;

d) Other cases prescribed by law.

The suspension shall comply with regulations of the law on enforcement of civil judgments. The civil judgment-enforcing agency shall immediately notify the Court that has accepted the bankruptcy case of the enforcement of the judgment/decision specified in this clause.

2. The Court and the arbitrator shall suspend settlement of civil, business, commercial and labor cases related to the financial obligation in which the enterprise/cooperative is a litigant. Suspension procedures shall be followed in accordance with the civil procedure law and the law on commercial arbitration.

The Court shall separate and suspend the settlement of the civil part from a criminal or administrative lawsuit related to the financial obligation in which the enterprise is a litigant. Procedures for separation and suspension shall be only followed in accordance with the criminal procedure law and the administrative procedure law.

3. Other competent agencies and organizations, as prescribed by law, shall temporarily cease handling the enterprise’s/cooperative’s collateral for the secured creditors, unless otherwise provided for by law.

The Government shall elaborate this clause;

4. In case the collateral is at risk of being destroyed or significantly devalued, it shall be handled in accordance with clauses 2 and 3, Article 44 of this Law;

5. Competent agencies and organizations, as prescribed by law, shall temporarily cease taking coercive measures to recover debt, and other measures intended to force the enterprise/cooperative to fulfill the obligation to its asset.

Section 2. INITIATION OF BANKRUPTCY PROCEDURES

Article 41. Decision to initiate or not to initiate bankruptcy procedures

1. Within 30 days from the date of acceptance of the written petition for application of bankruptcy procedures, the Judge shall issue a decision to initiate or not to initiate bankruptcy procedures.

2. The decision to initiate or not to initiate bankruptcy procedures comes into force from the date of issuance.

3. The Court’s decision to initiate or not to initiate bankruptcy procedures shall be sent to the petitioner, the enterprise, the cooperative, the creditor, the People’s Procuracy of the same level, the civil judgment-enforcing agency, the tax administration authority, the business registration agency, and relevant agencies, organizations, and individuals within 03 working days from the date on which the People’s Court issues the decision.

4. Within 10 days from the date of receipt of the decision to initiate or not to initiate bankruptcy procedures, the participant in such procedures shall be entitled to request a review, and the People’s Procuracy of the same level shall be entitled to protest against the decision.

5. Within 10 days from the date of receipt of the request for review and the protest, the Chief Justice of the Court shall conduct review and take actions as follows:

a) Uphold the decision to initiate or not to initiate bankruptcy procedures;

b) Annul the decision to initiate or not to initiate bankruptcy procedures and issue a decision not to initiate or to initiate bankruptcy procedures;

c) Annul the decision to initiate or not to initiate bankruptcy procedures and terminate the implementation of bankruptcy procedures;

d) Terminate processing of the request for review or implementation of protest against the decision to initiate or not to initiate bankruptcy procedures in case the requester withdraws the written request and the People’s Procuracy withdraws the written protest.

6. The decision issued by the Chief Justice of the Court as prescribed in clause 5 of this Article is final decision and comes into force. The decision prescribed in clause 3 or clause 5 of this Article shall be posted on the national e-portal on bankruptcy and rehabilitation of enterprises/cooperatives.

Article 42. Operations and supervision of operations conducted by enterprises/cooperatives after decisions to initiate bankruptcy procedures are issued

1. After the decision to initiate bankruptcy procedures is issued, the enterprise’s/cooperative’s business operations shall be conducted in accordance with clause 1, Article 30 of this Law. In case the legal representative of the enterprise/cooperative is deemed incapable of management, or if the enterprise/cooperative shows any sign of violation specified in clause 2 of this Article, the Judge shall issue a decision to replace the legal representative of such enterprise/cooperative as requested by the creditor representative board, the creditors’ meeting, the asset management officer, the asset management and liquidation enterprise, or the persons specified in points b, c, and d, clause 2, Article 38 of this Law.

2. After the decision to initiate bankruptcy procedures is issued, the enterprise/cooperative is prohibited from:

a) Concealing, dispersing, or giving away assets;

b) Waiving the right to recover debts;

c) Paying unsecured debts, except for unsecured debts arising after the initiation of bankruptcy procedures and salaries to employees working for the enterprise/cooperative;

d) Converting debts unsecured into debts secured or debts partially secured by the assets owned the enterprise or cooperative;

dd) Distributing profits and income.

3. After the decision to initiate bankruptcy procedures is issued, the enterprise/cooperative shall send a report to the asset management officer, the asset management and liquidation enterprise, and the creditor representative board before conducting operations specified in clause 1, Article 32 of this Law. The asset management officer or the asset management and liquidation enterprise shall report to the Judge on such supervision.

4. Synchronous transfer of assets, transfer of a part or the whole of a business segment or business operation, and transfer of a part or the whole of the enterprise or cooperative shall be considered and decided by the creditors’ meeting. Procedures and conditions for the transfer of assets shall comply with the law.

5. The Government shall elaborate this Article.

Article 43. Determination of interest on debts

1. From the date on which the decision to initiate bankruptcy procedures is issued, the interest on debts shall continue to be charged as agreed, but the payment of such interest may be suspended, unless otherwise prescribed by law.

In case the Judge issues a decision to terminate bankruptcy procedures as provided for in Article 64 of this Law, the parties shall continue to pay interest as agreed.

2. New debts incurred from the initiation of bankruptcy procedures until the declaration of bankruptcy of the enterprise/cooperative, the interest on such debts shall be determined as agreed in accordance with the law.

3. From the date of issuance of the decision declaring that the enterprise/cooperative is bankrupt, the interest on debts is no longer charged.

Article 44. Settlement of secured debts

1. After the initiation of bankruptcy procedures, the asset management officer/asset management and liquidation enterprise shall recommend the Judge for settlement of secured debts as follows:

a) In case the collateral is used to implement the business rehabilitation plan, the collateral shall be only handled according to the resolution issued by the creditors’ meeting after the creditor of collateral grants consent;

b) In case the business rehabilitation plan is not implemented or the collateral is not necessary for the implementation of such plan, the collateral shall be handled in accordance within the time limit specified in the secured contract which is due. Regarding any secured contract that has not yet become due, when declaring that the enterprise/cooperative is bankrupt, the Judge shall terminate the contract and settle the secured debts. The secured debts shall be settled in accordance with clause 2 of this Article. Regulations in this point do not apply to the cases specified in clause 4, Article 42 of this Law.

2. The collateral shall be handled as follows:

a) Secured debts determined before the Court accepts the written petition for initiation of bankruptcy procedures shall be paid by the collateral;

b) In case that the value of the collateral is insufficient to pay the debt, the remaining debt will become the enterprise’s/cooperative’s unsecured debt; if the value of the collateral is higher than the debt, the difference shall be included in total value of the enterprise’s/cooperative’s asset.

3. In case the collateral is at risk of being destroyed or significantly devalued, the asset management officer or the asset management and liquidation enterprise shall request the Judge to immediately handle the collateral in accordance with clause 2 of this Article.

4. The asset management officer/asset management and liquidation enterprise shall recommend the Judge for settlement of the collateral specified in this Article in accordance with the law and guidelines given by the Supreme People’s Court.

5. The Supreme People’s Court shall elaborate and provide guidance on this Article.

Article 45. Financial obligation in case of joint obligation or guarantee obligation

1. If there are multiple enterprises/cooperatives having a joint obligation to a debt while one or all of the enterprises/cooperatives are insolvent, the creditor is entitled to claim the payment for the debt from any enterprise/cooperative according to regulations of the Law.

2. In case the guarantor is insolvent, the guarantee is prescribed as follows:

a) The guarantor shall fulfill the guarantee obligation that arises. If the guarantor does not make full payment within the scope of guarantee, the obligee may request the obligor to pay the amount that has not yet been paid;

b) If the guarantee obligation does not arise, the obligor must take another security measure, except for the case where the obligor has another agreement with the obligee.

3. If the obligor or both the guarantor and the obligor is/are insolvent, the guarantor shall be liable on behalf of the obligor in accordance with law.

Article 46. Asset distribution order

1. When the Judge issues a Decision to declare the enterprise/cooperative is bankrupt, the enterprise’s/cooperative’s asset shall be distributed in the following order:

a) Bankruptcy cost;

b) Unpaid salaries;

c) Unpaid premiums of compulsory social insurance, unemployment insurance, health insurance, and occupational accident and disease insurance;

d) Severance allowances and other benefits of employees according to the collective bargaining agreement and the signed labor contract;

dd) Debts incurred for rehabilitation of the enterprise’s/cooperative’s business;

e) Financial obligation to the State;

e) Unsecured debts payable to the creditor on the list of creditors; secured debts which have not yet been paid because the value of collateral is insufficient to cover such debts.

2. After the amounts specified in clause 1 of this Article have been completely paid, the remaining value of the asset will be distributed to:

a) Member of the cooperative or the member cooperative;

b) Owner of a sole proprietorship;

c) Owner of a single-member limited liability company;

d) Member of a limited liability company with two or more members, shareholder of a joint-stock company;

dd) Member of a partnership.

3. If the value of the asset owned by the enterprise/cooperative is insufficient to make the payment as prescribed in clause 1 this Article, the payees in the same group of priority shall be paid in percent in proportion to the debt.

Article 47. Return of collateral

The enterprise/cooperative shall only return the collateral to an individual/organization that has transferred the collateral to fulfill their obligation to the enterprise/cooperative before the Court initiates bankruptcy procedures, in case the individual/organization has completely fulfilled their obligation to the enterprise/cooperative.

Article 48. Receiving goods sold back

If the seller has sent goods to the purchaser that is the enterprise/cooperative but has not received the payment for such goods and the purchaser has not received such goods, the seller shall receive back the goods. If the enterprise/cooperative has received the goods and cannot return them, the seller shall be considered as the unsecured creditor.

Article 49. Transactions considered null and void

1. Unless otherwise provided by this Law, transactions conducted by the enterprise/cooperative within 06 months prior to the date on which the Court issues the decision to initiate bankruptcy procedures shall be considered null and void in one of the following cases:

a) Carrying out transactions related to transfer of the assets without applying market prices;

b) Converting debts unsecured into debts secured or debts partially secured by the assets owned the enterprise or cooperative;

c) Paying off or clearing a debt that has not yet become due, or overpaying a debt due, in a creditor’s interest, unless otherwise provided by this Law;

d) Giving away the assets;

dd) Carrying out transactions for non-profit purposes;

e) Carrying out other transactions for the purpose of dispersing the assets owned the enterprise/cooperative.

2. A transaction conducted by the enterprise/cooperative as prescribed in clause 1 this Article with the related persons within 18 months prior to the date on which the Court issues the Decision on initiation of bankruptcy procedures, shall be considered null and void.

3. The related persons specified in clause 2 of this Article shall be identified according to regulations of the law and guidelines given by the Supreme People’s Court.

4. The asset management officer or asset management and liquidation enterprise shall be responsible for reviewing transactions conducted by the enterprise/cooperative. If the transactions specified in clause 1 and clause 2 of this Article are detected, the Court is required to consider declaring such transactions null and void.

5. The Supreme People’s Court shall elaborate and provide guidance on this Article, except for the case specified in point c clause 1 of this Article.

6. The Government shall elaborate point c clause 1 of this Article.

Article 50. Declaring transactions null and void

1. Within 10 days from the date on which the asset management officer/asset management and liquidation enterprise/participant in bankruptcy procedures makes a request to declare a transaction null and void or the Judge currently settling the bankruptcy case detects the transaction prescribed in clause 2 Article 42, clauses 1 and 2 Article 49 of this Law, the Judge shall hold a meeting to consider declaring the transaction null and void.

Procedures and participants in the meeting shall comply with regulations in clauses 2 and 3 Article 60 of this Law.

2. When the Judge considers declaring the transaction null and void, he/she shall issue one of the following decisions:

a) Refuse the request for declaration;

b) Declare the transaction null and void, cancel security measures, and handle the consequences arising from the transaction null and void in accordance with the law.

3. The decision to declare the transaction null and void comes into force from the date of issuance.

4. Within 05 working days from the date of receipt of the decision specified in clause 2 of this Article, the enterprise/cooperative/asset management officer/asset management and liquidation enterprise/participant in bankruptcy procedures may send a written request to the Chief Justice of the Court in order to reconsider the decision.

5. Within 05 working days from the date of receipt of the written request for reconsideration, the Chief Justice of the Court that has issued the decision shall issue one of the following decisions:

a) Refuse the request for reconsideration;

b) Annul the Decision to declare the transaction null and void. Any dispute shall be settled according to clause 2 Article 60 of this Law;

c) Annual the decision to refuse the request for declaration and issue a decision to declare the transaction null and void.

6. Within 15 days from the date of receipt of the decision specified in point b clause 2, point c clause 5 of this Article, the civil judgment-enforcing agency shall be responsible for enforcing the decision in accordance with the law.

Article 51. Suspension/termination of execution of effective contracts

1. Within 05 working days from the date on which the Court accepts the written petition for application of bankruptcy procedures, if a contract is deemed likely to be detrimental to the enterprise/cooperative, the creditor/the enterprise/the cooperative is entitled to request the Court to issue a decision to suspend the execution of such contract, except for cases of settlement of secured debts as provided in Article 44 of this Law and unless otherwise provided by this Law.

2. Within 05 working days from the date of receipt of the written request, if the written request is accepted, the Court shall issue a decision to suspend the execution of the contract; if the written request is not accepted, the Court shall notify the requester in writing.

3. Within 05 working days from the date on which the Court issues the decision to initiate bankruptcy procedures, the Court shall review the suspended contracts specified in clause 1 of this Article to issue one of the following decisions:

a) Continue the execution of the contract if the contract is currently effective and is being executed, or if the execution of the contract is not detrimental to the enterprise/cooperative;

b) Terminate the execution of the contract and handle consequences in accordance with Article 52 of this Law.

4. In case the Court decides not to initiate bankruptcy procedures, the Court that has issued the decision to suspend the execution of the contract shall issue a decision to annul such decision.

5. After the initiation of bankruptcy procedures, if a contract is deemed likely to be detrimental to the enterprise/cooperative, the Court shall, at the request of the asset management officer, the asset management and liquidation enterprise, the creditor, or the enterprise/cooperative, consider deciding to terminate the execution of such contract, except for cases of the settlement of secured debts as provided in Article 44 of this Law and unless otherwise provided by this Law.

6. The Government shall elaborate clauses 1 and 5 of this Article.

Article 52. Payment and compensation for damages upon termination of execution of contracts

1. When the execution of a contract is terminated as provided for in Article 51 of this Law, if the asset received by the enterprise/cooperative under the contract still exists among the assets owned by the enterprise/cooperative, the party to the contract with the enterprise/cooperative is entitled to reclaim such asset and refund the amount received from the enterprise/cooperative; if the asset no longer exists, the party to the contract shall have the rights of an unsecured creditor to the unpaid amount.

2. In case the termination of execution of contract causes damage to the party to the contract with the enterprise/cooperative, the party to the contract shall have the rights of an unsecured creditor to the damage.

Article 53. Clearing obligations

1. After the Court issues a decision to initiate bankruptcy procedures, the clearing of obligations that are due before such decision is issued shall only be conducted between the enterprise/cooperative and each creditor.

The asset management officer or the asset management and liquidation enterprise shall request the Judge to conduct review and give opinions before the clearing of obligations, unless otherwise provided by law.

2. Methods of clearing obligations:

a) If the parties have equivalent obligations to the assets, they are not required to fulfill the obligations to each other and the obligations will be considered to be terminated;

b) If the financial obligations of the parties are not equivalent and the value of the enterprise’s/cooperative’s assets is larger than the debt, the party to the contract with the enterprise/cooperative shall pay for the difference in asset value for aggregation with the assets owned by the enterprise/cooperative;

c) If the financial obligations of the parties are not equivalent and the value of the enterprise’s/cooperative’s assets is smaller than the debt, the party to the contract with the enterprise/cooperative will become an unsecured creditor of the difference in asset value.

3. The Government shall elaborate clause 1 of this Article.

Article 54. Enterprises’/cooperatives’ assets

1. Unless otherwise provided by law, an enterprise’s/cooperative’s assets include:

a) Assets and the ownership of assets at the time the Court issues the decision to initiate bankruptcy procedures;

b) Assets and the ownership of assets, acquired after the Court issues the decision to initiate bankruptcy procedures;

c) Land use right value determined in accordance with the law;

d) Dispersed and hidden assets that are recovered;

dd) Assets and the ownership of assets recovered from the transaction null and void;

e) Other assets prescribed by law.

2. Assets owned by a partnership or sole proprietorship include:

a) Assets specified in clause 1 of this Article;

b) Assets owned by the sole proprietorship’s owner or a general partner and not directly used for business operations; in case where the owner or partner has assets under the joint ownership, such assets shall be distributed in accordance with the civil law and other relevant laws.

3. In case a cooperative is declared bankrupt, undistributed fund and assets shall be handled in accordance with the law on cooperatives.

Article 55. Sending debt claim forms and compiling lists of creditors and debtors

1. Within 15 days from the date on which the Court issues the decision to initiate bankruptcy procedures, the creditor shall send a debt claim form enclosed with documents and evidence proving the debt to the asset management officer or the asset management and liquidation enterprise. If the creditor fails to send the debt claim form by this deadline, the creditor shall forfeit their right to participate in bankruptcy procedures.

In case of force majeure or objective obstacles, the creditor is entitled to send a debt claim form, and the Court shall include them in the list of creditors before issuing the decision to declare the enterprise/cooperative bankrupt. From the time they are included in the list of creditors of the enterprise/cooperative, the creditor shall have the rights and obligations as prescribed by this Law.

2. Debts arising after the deadline specified in clause 1 of this Article expires, shall be declared within 03 working days from the date on which the debts arise.

3. The asset management officer, the asset management and liquidation enterprise shall compile a list of creditors/debtors, verify debts, and collect documents related to such debts. The list of creditors/debtors must clearly state name, address of and debt incurred by each creditor and debtor, secured debts, unsecured debts, debts due, debts that have not yet become due, and other necessary information.

4. The list of creditors/debtors shall be posted on the national e-portal on bankruptcy and rehabilitation of enterprises/cooperatives within at least 07 days prior to the date on which the creditors’ meeting is convened.

5. Within 10 days from the date on which the Court publicly announces the list, participants in bankruptcy procedures and persons with related rights and obligations are entitled to request the Judge to review the list of creditors/debtors. The Judge may summon the related parties to consider processing the request; if there are grounds, the Judge shall revise the list of creditors/debtors.

6. The Supreme People’s Court shall elaborate and provide guidance on this Article.

Article 56. Inventory of enterprises’/cooperatives’ assets

1. Within 15 days from the date of receipt of the decision to initiate bankruptcy procedures, the enterprise/cooperative shall make an inventory, report inventory result, and determine the asset value; if necessary, a written request must be submitted to the Judge for an extension up to 15 days and a maximum of 02 extensions is permitted. The value of assets owned by the enterprise/cooperative shall be determined in accordance with the law.

2. In case the legal representative of the enterprise/cooperative is absent, the person designated by the asset management officer or the asset management and liquidation enterprise to act as the representative of the enterprise/cooperative shall make the inventory and determine the value of assets owned by the enterprise/cooperative.

3. The inventory of assets whose value has been determined shall be immediately sent to the Court initiating bankruptcy procedures.

4. In case where inventory and determination of value of the assets owned by the enterprise/cooperative specified in clause 1 of this Article are deemed inaccurate, the Judge shall request the asset management officer or the asset management and liquidation enterprise to re-make the inventory and re-determine of value of part or all of the assets owned the enterprise/cooperative. The time limit for re-inventory/re-determination of value of the assets owned by the enterprise/cooperative is 15 days from the date of receipt of the Court’s request. The asset value shall be determined and the asset shall be valued according to the market price at the time of the inventory.

5. In case where the representative of the enterprise/cooperative and other persons fail to cooperate in inventory of the assets, intentionally conceal the assets, or falsify the inventory, they shall be dealt with in accordance with regulations of law.

Article 57. Enterprises’/cooperatives’ registration of security measures

If the enterprise/cooperative lends their assets to others and security measures must be registered in accordance with the law but the registration has not yet been applied for, the asset management officer or the asset management and liquidation enterprise shall apply for the registration of security measures.

Article 58. Application of provisional emergency measures

1. During the processing of the petition for the application of bankruptcy procedures, the person entitled/obliged to submit the written petition as prescribed in Article 38 of this Law, the asset management officer, or the asset management and liquidation enterprise is entitled to request the competent Court to issue a decision to apply one or several of the following provisional emergency measures to preserve the assets owned by the enterprise/cooperative and protect the legitimate rights and interests of employees:

a) Allowing sale of goods/assets perishable, nearly-expired or unlikely to be consumed unless sold at the right time; harvest and sale of farm products or other goods/ products;

b) Allowing sale of goods/assets that are difficult in preservation or goods/assets if preservation, storage or safekeeping costs exceed their value;

c) Distraining and sealing the enterprise’s/cooperative’s assets;

d) Freezing the account of the enterprise/cooperative at a credit institution; freezing assets at the depository;

dd) Sealing storages and fund, keeping and managing the accounting book and relevant documents;

e) Prohibiting transfer of the rights to the assets owned by the enterprise/cooperative;

g) Prohibiting change to the current condition of the assets owned by the enterprise/cooperative;

h) Compelling the handover or receipt of the assets;

i) Prohibiting or compelling the enterprise, cooperative, or other related individuals and organizations from performing/to perform certain acts;

k) Compelling the enterprise/cooperative to advance wages, salaries, compensation, occupational accident benefits or occupational disease benefits to employees

l) Take other provisional emergency measures to preserve the assets owned by the enterprise or cooperative in accordance with the guidelines given by the Supreme People’s Court or as prescribed by law.

2. The Supreme People’s Court shall elaborate and provide guidance on this Article.

Article 59. Handling of suspension of enforcement of civil judgments, settlement of cases and temporary cessation of response to requests for enterprises’/cooperatives’ fulfillment of financial obligations

1. In case bankruptcy procedures are not initiated:

a) The Court, arbitrator, or civil judgment-enforcing agency that has issued the suspension decision as prescribed in clauses 1 and 2, Article 40 of this Law, shall issue a decision to resume the settlement of the case or the enforcement of the judgment;

b) Another competent agency/organization that has temporarily ceased the response to request for the enterprise’s/cooperative’s fulfillment of the financial obligation as prescribed in clause 5, Article 40 of this Law, shall resume the response.

2. In case bankruptcy procedures are initiated:

a) The Court, arbitrator, or civil judgment-enforcing agency that has issued the suspension decision as prescribed in clauses 1 and 2, Article 40 of this Law, shall issue a termination decision and transfer the case file to the Court currently initiating bankruptcy procedures;

b) Another competent agency/organization that has temporarily ceased the response to request for the enterprise’s/cooperative’s fulfillment of the financial obligation as prescribed in clause 5, Article 40 of this Law, shall cease the response.

Article 60. Handling of termination of enforcement of civil judgments and settlement of cases

1. In case of judgment enforcement termination as prescribed in clause 2, Article 59 of this Law, on a case-by-case basis, the Court currently implementing bankruptcy procedures shall handle the termination as follows:

a) In case where the Court’s judgment/decision or an arbitrator’s verdict has taken legal effect and no decision on distraint of the assets owned by the enterprise/cooperative is issued for enforcement of the judgment, the judgment creditor shall be identified as an unsecured creditor;

b) In case where the Court’s judgment/decision or an arbitrator’s verdict has taken legal effect and a decision on distraint of the assets owned by the enterprise/cooperative is issued for enforcement of the judgment, the judgment creditor shall be identified as a secured creditor.

2. In case of termination of the settlement of the case as prescribed in point a, clause 2, Article 59 of this Law, after receiving the case file transferred by the Court or arbitrator that has issued the decision to terminate the settlement of the case, the Court currently implementing bankruptcy procedures shall consider handling the termination as follows:

a) Depending on the quantity and complexity of disputes, the Court’s Chief Justice shall decide to assign one or several Judges to resolve each dispute;

b) The Judge must notify the enterprise/cooperative/relevant agencies, organizations and individuals, the asset management officer, the asset management and liquidation enterprise, and the Procurator to participate in a hearing;

c) The Judge must hold a hearing to consider resolving the dispute. The decision to resolve the dispute shall immediately take effect;

d) The decision to resolve the dispute shall be sent to the Procuracy, the enterprise, the cooperative, and the agency/organization/individual having the related rights and obligations, the asset management officer, and the asset management and liquidation enterprise;

dd) Within 05 working days from the date of receipt of the decision to resolve the dispute, the enterprise, cooperative, litigant, the agency/organization/individual related to the dispute shall be entitled to request review; the Procuracy at the same level is entitled to recommend the Chief Justice of the Court to review the decision to resolve the dispute;

e) Within 15 days from the date of receipt of the request for review or recommendation, the Court’s Chief Justice shall issue a decision to uphold the Judge’s decision to resolve the dispute; revise the Judge’s decision; or terminate the review if the requester withdraws the written request or the Procuracy withdraws the recommendation.

The Chief Justice’s decision on the response to the request for review or the recommendation mentioned in this Clause shall be the final decision. This decision must be sent to the enterprise, cooperative, litigant, and the Procuracy.

3. After the resolution of dispute, the financial obligations to be fulfilled by the enterprise/cooperative, or to be fulfilled by another litigant to the enterprise/cooperative, shall be determined as follows:

a) In case where the enterprise/cooperative must fulfill the financial obligations, persons to whom the enterprise/cooperative owes the financial obligations are entitled to request payment from the enterprise’s/cooperative’s assets similarly to creditors;

b) In case where the litigant must fulfill the financial obligation to the enterprise/cooperative, they must pay the enterprise/cooperative the value corresponding to the financial obligation.

4. After the Court accepts the written petition for the application of bankruptcy procedures, any lawsuit or petition against the enterprise/cooperative shall only be settled at the Court that has accepted the written petition for the application of bankruptcy procedures.

5. From the time the Court accepts the written petition for the application of bankruptcy procedures until before the decision to declare the enterprise/cooperative bankrupt is issued, any arising dispute or petition shall be resolved by the Court in accordance with Clauses 2 and 3 of this Article.

6. The Supreme People’s Court shall elaborate and provide guidance on this Article.

Section 3. CREDITORS’ MEETING

Article 61. Creditors’ meeting

1. Except for the case where a creditors’ meeting is not required to be held as prescribed in points c, d, and dd, clause 1, Article 70 of this Law, the Court must convene a creditors’ meeting after the inventory of assets owned by the enterprise/cooperative is completed, or when it is necessary to decide the matters within the jurisdiction of the creditors’ meeting as prescribed in clause 6 of this Article

2. Persons entitled to participate in the creditors’ meeting shall comply with regulations of clause 3, Article 33 of this Law.

3. The following persons are obliged to participate in the creditors’ meeting:

a) The person submitting written petition for application of bankruptcy procedures as stipulated in Article 38 of this Law, and the enterprise’s owner or the legal representative of the enterprise/cooperative; in case of inability to participate, he/she must authorize another person in writing to participate in the creditors’ meeting and the authorized person shall have the same rights and obligations as those of the authorizing person.

b) The asset management officer and asset management and liquidation enterprise.

4. The asset management officer shall chair the creditors’ meeting.

5. A resolution of the creditors’ meeting will be approved when it is voted for by a number of creditors representing at least 65% of the total number of unsecured creditors. Such resolution shall be binding on all creditors.

6. The creditors’ meeting is entitled to issue a resolution concluding one of the following matters:

a) Request for termination of bankruptcy procedures in the case specified in clause 1 Article 64 of this Law;

b) Approval of the business rehabilitation plan for the enterprise/cooperative and request for the Court’s recognition. In this case, the enterprise/cooperative must have the business rehabilitation plan;

c) Request for declaring the enterprise/cooperative is bankrupt;

d) Synchronous transfer of assets, transfer of a part or the whole of a business segment or business operation, and transfer of a part or the whole of the enterprise or cooperative. In case of transfer of collateral, the creditor of such collateral shall give consent;

dd) Other matters.

7. In case where the creditors’ meeting fails to approve the resolution as prescribed in points a, b, and c, clause 6 of this Article, the Court shall issue a decision to declare the enterprise/cooperative bankrupt in accordance with point a, clause 1, Article 65 of this Law.

8. Within 03 working days from the date on which the creditors’ meeting is convened, the Court shall send the creditors’ meeting’s resolution to the Procuracy and the persons entitled/obliged to participate in the creditors’ meeting.

Article 62. Request and recommendation for review of creditors’ meeting’s resolution and response to and implementation of such request and recommendation

1. In case of failure to give consent to the creditors’ meeting’s resolution, within 05 working days from the date of receipt of the resolution, the person entitled/obliged to participate in the creditors’ meeting is entitled to submit a written request, and the Procuracy is entitled to recommend the Chief Justice of the Court currently implementing bankruptcy procedures to review the creditors’ meeting’s resolution.

2. Within 10 days from the date of receipt of the written request/recommendation, the Chief Justice of the Court currently implementing bankruptcy procedures shall conduct review and issue one of the following decisions:

a) Refuse the request/recommendation;

b) Re-convene the creditors’ meetings.

3. Within 03 working days from the date of issuance of the decision, the decision to response to the request or implement the recommendation must be sent to the Procuracy and the person entitled/obliged to participate in the creditors’ meeting/

4. The Chief Justice’s decision specified in clause 2 of this Article shall be final decision.

Article 63. Recognition of creditors’ meeting’s resolution on approval of business rehabilitation plan and implementation of business rehabilitation plan

1. Within 10 days from the date on which the creditors’ meeting’s resolution on approval of the business rehabilitation plan is issued, the Judge shall consider issuing a decision to recognize the resolution. The creditors’ meeting’s resolution comes into force from the date on which the Court issues the decision to recognize the resolution.

From the effective date of the creditors’ meeting’s resolution, the measures to prohibit and supervise the enterprise/cooperative specified in Article 32 and clause 2 Article 42 of this Law shall be automatically terminated. The decision to recognize the creditors’ meeting’s resolution shall be sent to the enterprise, cooperative, creditor, and the Procuracy within 03 working days from the date on which the decision is issued.

In case the Judge decides not to recognize the creditors’ meeting’s resolution, the Judge shall issue a decision to declare the enterprise/cooperative bankrupt.

2. The business rehabilitation plan shall be implemented in accordance with Articles 29, 35 and 36 of this Law.

3. The Judge shall issue a decision to terminate the implementation of the business rehabilitation plan to the enterprise/cooperative undergoing bankruptcy procedures in the following cases:

a) The enterprise/cooperative has completed the business rehabilitation plan;

b) The enterprise/cooperative fails to implement the business rehabilitation plan;

c) The time limit for implementation of business rehabilitation plan expires.

4. The Court shall publicly announce the decision to terminate the implementation of the business rehabilitation plan in accordance with regulations of this Law.

5. Legal consequences of the termination of the implementation of the business rehabilitation plan:

a) In the case prescribed in point a, clause 3 of this Article, the enterprise/cooperative shall be deemed no longer insolvent. The Judge shall consider deciding to terminate the bankruptcy procedures in accordance with regulations of clause 1, Article 64 of this Law;

b) In the case prescribed in points b and c, clause 3 of this Article, if the enterprise/cooperative remains insolvent, The Judge shall consider issuing a decision to declare the enterprise/cooperative bankrupt.

Article 64. Termination of bankruptcy procedures

1. From the date on which the Court issues the decision to initiate bankruptcy procedures until before the date on which the decision to declare the enterprise/cooperative bankrupt is issued, if the enterprise/cooperative is no longer insolvent, the Court shall issue a decision to terminate bankruptcy procedures. Regarding any dispute related to the enterprise/cooperative that has not yet been resolved, the parties are entitled to choose a dispute resolution method in accordance with the law.

2. In case the disputing parties fail to reach an agreement, the Court shall take actions as follows:

a) If the case is terminated by the Court or the arbitrator in accordance with point a clause 2 Article 59 of this Law, the Court shall transfer the case file to the Court or the arbitrator that has issued the termination decision to consider taking actions in accordance with the law;

b) In case a dispute arises during the settlement of bankruptcy case, the Court shall issue a decision to terminate the resolution of such dispute, and the parties are entitled to request the competent Court or arbitrator to take actions in accordance with regulations of law.

3. In case where the civil judgment-enforcing agency has issued a decision to terminate the judgment enforcement as prescribed in point a, clause 2, Article 59 of this Law, such agency shall issue a decision to revoke the judgment enforcement termination decision and a decision to resume the judgment enforcement.

4. The decision to terminate bankruptcy procedures must be sent to the agency/organization/individual as prescribed in clause 3, Article 41 of this Law within 03 working days from the date on which the decision is issued.

Within 07 days from the date of receipt of the decision, the participant in bankruptcy procedures shall be entitled to request a review, and the People’s Procuracy of the same level shall be entitled to protest against the decision to the Chief Justice of the Court currently implementing bankruptcy procedures.

5. Within 03 working days from the date of receipt of the request for review and the protest specified in clause 2 of this Article, the Chief Justice of the Court currently implementing bankruptcy procedures shall consider implementing protest against and processing request for review of the decision to terminate bankruptcy procedures and issuing one of the following decisions:

a) Uphold the decision to terminate bankruptcy procedures;

b) Annul the decision to terminate bankruptcy procedures and assign the Judge to implement bankruptcy procedures.

6. The decision to process request for review or implement protest against the decision to terminate bankruptcy procedures must be sent to the agency/organization/individual as prescribed in clause 3, Article 41 of this Law within 03 working days from the date on which the decision is issued.

7. If the Court issues the decision to terminate bankruptcy procedures, the remaining bankruptcy advance shall be refunded to the payer.

Section 4. DECLARING ENTERPRISES/COOPERATIVES BANKRUPT

Article 65. Decision to declare enterprises/cooperatives bankrupt

1. If the dispute related to the enterprise/cooperative has been completely resolved by the Court, the Court shall issue a decision to declare the enterprise/cooperative bankrupt within 15 days in one of the following cases:

a) From the date of receipt of the report on the result of the creditors’ meeting which shows that the creditors’ meeting fails to approve the resolution as prescribed in points a, b, and c, clause 6, Article 61 of this Law;

b) From the date of receipt of the creditors’ meeting’s resolution which concludes the proposal to declare the enterprise/cooperative bankrupt;

e) From the date of receipt of the report which states that the enterprise/cooperative has failed to implement the business rehabilitation plan from the asset management officer, or the time limit for the implementation of the business rehabilitation plan has expired but the enterprise/cooperative remains insolvent;

d) From the date on which the Judge issues the decision not to recognize the creditors’ meeting’s resolution as prescribed in clause 1, Article 63 of this Law.

2. A decision to declare the enterprise/cooperative bankrupt must contain the main following contents:

a) Name of the Court that has issued the decision, full name of the Judge that implements bankruptcy procedures;

b) Information on the enterprise/cooperative declared bankrupt;

c) Grounds for declaration;

d) Termination of operations conducted by the bankrupt enterprise/cooperative; termination of transactions related to the enterprise/cooperative; cessation of the fulfillment of the obligation to calculate interest to the enterprise/cooperative; handling of consequences of the terminated transactions; declaration and handing of consequences of transactions null and void; termination of labor contracts with employees and protection of their rights and interests.

dd) Termination of the power of the legal representative of the enterprise/cooperative;

e) Recovery of the debt and handling of the collateral in case the secured contract has not yet been due;

g) Appointment of a person in charge of accounting in accordance with the law on accounting;

h) Sale of the remaining assets of the enterprise/cooperative;

i) Plan to distribute the value of the asset before and after the declaration of bankruptcy in the order as prescribed in Article 46 of this Law;

k) Prohibition of holding positions after the enterprise/cooperative is declared bankrupt as prescribed in Article 84 of this Law;

l) Settlement of other issues.

3. The decision to declare the enterprise/cooperative bankrupt comes into force from the date of issuance of the decision.

4. After issued, the decision to declare the enterprise/cooperative bankrupt shall not be revised, except for cases of obvious spelling errors and numerical errors due to confusion or miscalculation, and the case prescribed in point b, clause 2, Article 81 of this Law.

5. Within 15 days from the date of receipt of a written request from the civil judgment-enforcing agency, the enforcer, the asset management officer, or the asset management and liquidation enterprise, the Court shall provide an explanation of the decision to declare the enterprise/cooperative bankrupt.

6. Within 10 days from the date on which the decision to declare the enterprise/cooperative bankrupt is issued, the Court shall send the decision or an extract of the decision to the participants in bankruptcy procedures, the Procuracy, relevant agencies, organizations and individuals, the civil judgment-enforcing agency, and the business registration agency to change the legal status of the enterprise, cooperative, its branch, representative office, or business location to bankrupt status, and post it on the national e-portal on bankruptcy and rehabilitation of enterprises/cooperatives.

Article 66. Financial obligation after issuance of decision to declare enterprises/cooperatives bankrupt

1. According to the decision to declare the enterprise/cooperative bankrupt as prescribed in Article 65 and clause 2, Article 71 of this Law, a sole proprietorship’s owner or a general partner of a partnership is not exempt from the financial obligation to the creditor whose debts remain unpaid, unless the participants in bankruptcy procedures have other agreements or unless otherwise prescribed by the law.

2. The financial obligation arising after the decision to declare the enterprise/cooperative bankrupt is issued shall be fulfilled in accordance with the law on enforcement of civil judgment and relevant laws.

Article 67. Request for review and protest against decision to declare the enterprise/cooperative bankrupt

1. The persons notified as prescribed in clause 6, Article 65 of this Law, and other persons who are not participants in bankruptcy procedures but whose legitimate rights and interests are infringed upon, are entitled to request a review of the decision to declare the enterprise/cooperative bankrupt. The Procuracy is entitled to protest the decision to declare the enterprise/cooperative bankrupt in case such decision seriously infringes upon public interests or State interests.

2. The time limit for a request for review or a protest is 10 days from the date of receipt of the decision or from the date on which the decision to declare the enterprise/cooperative bankrupt is lawfully notified.

Within 03 working days from the date of receipt of the request for review or protest, the Court that has issued the decision to declare the enterprise/cooperative bankrupt must send the bankruptcy case file enclosed with the written request/protest to the competent provincial People’s Court for review and processing.

3. Within 10 days from the date of receipt of the file, the Panel of Judges of the provincial People’s Court must hold a hearing to consider processing the written request for review or implementing the protest against the decision to declare the enterprise/cooperative bankrupt, and shall issue one of the following decisions:

a) Refuse the written request/protest and uphold the decision to declare the enterprise/cooperative bankrupt;

b) Revise the decision to declare the enterprise/cooperative bankrupt;

c) Annul the decision to declare the enterprise/cooperative bankrupt and transfer the file to the competent inferior People’s Court for re-settlement.

4. The Supreme People’s Court shall review the decision prescribed in clause 3 of this Article if such decision seriously infringes upon public interests or State interests; or seriously infringes upon the legitimate rights and interests of participants in bankruptcy procedures or other persons who are not participants in bankruptcy procedures, and when there is one of the following grounds:

a) Committing a serious violation against the law on bankruptcy and rehabilitation;

b) Detecting new facts which may substantially change the contents of the decision to declare the enterprise/cooperative bankrupt and the Court and the participants in bankruptcy procedures do not know when the Court issues the decision.

5. The decision of the Supreme People’s Court as prescribed in clause 4 of this Article shall be the final decision and take legal effect from the date it is issued.

Chapter IV

SIMPLIFIED BANKRUPTCY/REHABILITATION PROCEDURES

Section 1. SIMPLIFIED REHABILITATION PROCEDURES

Article 68. Application of simplified rehabilitation procedures

1. Simplified rehabilitation procedures shall be followed in accordance with this Section. If this Section does not provide specific regulations, the corresponding regulations of this Law shall apply.

2. Within 10 days from the date of acceptance of the written petition for application of rehabilitation procedures, the Judge shall consider deciding the application of simplified rehabilitation procedures when the enterprise/cooperative falls into one of the following cases:

a) The enterprise/cooperative has up to 20 unsecured creditors and total principal debt payable is up to 10 billion VND;

b) The enterprise/cooperative is a small or micro-enterprise/cooperative;

c) Other cases prescribed by law.

3. When implementing simplified rehabilitation procedures, if there is any ground to determine that the case no longer satisfies the conditions for simplified procedures, the Court shall issue a decision to switch from simplified procedures to normal procedures.

4. The Supreme People’s Court shall elaborate and provide guidance on this Article.

Article 69. Simplified rehabilitation procedures

1. After the decision to apply simplified rehabilitation procedures is issued, the time limit for implementation of such procedures shall be half of the time limit for normal rehabilitation procedures.

2. The creditors’ meeting’s resolution will be approved when it is voted for by a number of creditors representing at least 51% of the total number of creditors.

Section 2. SIMPLIFIED BANKRUPTCY PROCEDURES

Article 70. Application of simplified bankruptcy procedures

1. Simplified bankruptcy procedures will be applied in one of the following cases:

a) The enterprise/cooperative has up to 20 unsecured creditors and total principal debt payable is up to 10 billion VND;

b) The enterprise/cooperative is a small or micro-enterprise/cooperative;

c) The enterprise/cooperative no longer has assets, or still has assets but they cannot be liquidated or recovered, or still has assets but they are insufficient to pay bankruptcy fee, bankruptcy advance, and bankruptcy cost;

c) The enterprise/cooperative is a credit institution;

dd) The Ministry of Finance has issued a document on termination of the application of control measure to an insurer or reinsurer but it has failed to correct the state causing it to be subject to the control measure in accordance with the Law on Insurance Business;

e) Other cases prescribed by law or according to guidelines given by the Supreme People’s Court.

2. Credit institutions shall implement bankruptcy procedures in accordance with Article 72 of this Law. In case Article 72 of this Law does not provide specific regulations, other regulations of this Law and the Law on Credit Institutions shall apply, except for those of Articles 61, 62, 63, and 64 of this Law.

3. Insurers and reinsurers specified in point dd clause 1 of this Article shall follow bankruptcy procedures in accordance with the Law on Insurance Business. In case the Law on Insurance Business does not provide specific regulations, the regulations of this Law shall apply, except for those in Articles 46, 61, 62, 63, and 64 of this Law.

4. The Supreme People’s Court shall elaborate and provide guidance on this Article.

Article 71. Simplified bankruptcy procedures

1. Within 10 days from the date of acceptance of the written petition for application of bankruptcy procedures, the Judge shall consider deciding the application of simplified bankruptcy procedures when the enterprise/cooperative falls into one of the cases specified in points a and b clause 1 Article 70 of this Law.

After the decision to apply simplified bankruptcy procedures is issued, the time limit for implementation of such procedures shall be half of the time limit for implementation of normal bankruptcy procedures.

The creditors’ meeting’s resolution will be approved when it is voted for by a number of unsecured creditors representing at least 51% of the total number of unsecured creditors.

2. Within 30 days from the date of acceptance of the written petition for application of bankruptcy procedures, the Court shall consider declaring the enterprise/cooperative bankrupt in one of the cases specified in point c clause 1 Article 70 of this Law.

Within 30 days from the date of approval of the creditors’ meeting’s resolution on petition for application of bankruptcy procedures, if the enterprise/cooperative no longer has the asset to pay bankruptcy advance according to point a, clause 4, Article 34 of this Law, the Court shall consider declaring the enterprise/cooperative bankrupt.

3. In case where the Court issues a decision to declare the enterprise/cooperative bankrupt as prescribed in point c, clause 1, Article 70 of this Law, the petitioner shall be refunded the remaining bankruptcy advance.

4. Simplified bankruptcy procedures shall be followed in accordance with this Section. This Section does not provide specific regulations, other regulations of this Law shall apply.

Article 72. Bankruptcy procedures for credit institutions

1. After the State Bank of Vietnam issues a document on termination of special control, or failure to apply or termination of the application of measures for recovery of solvency, but the credit institution remains insolvent, the following persons are entitled/obliged to submit a written petition for application of bankruptcy procedures:

a) The agency/organization/individual specified in clauses 1, 3 and 4 Article 38 of this Law;

b) The credit institution obligated to submit the written petition for application of bankruptcy procedures. If the credit institution fails to do so, the State Bank of Vietnam shall submit the written petition for application of bankruptcy procedures to the credit institution.

2. The Court shall accept the written petition for application of bankruptcy procedures to a credit institution when the State Bank of Vietnam has issued a document on termination of special control, or failure to apply, or termination of the application of measures for recovery of solvency, but the credit institution remains insolvent.

3. Within 10 days from the date of acceptance of the written petition for application of bankruptcy procedures, the Judge shall issue a decision to initiate bankruptcy procedures for the credit institution.

4. Regulations on transaction null and void in Article 49 of this Law do not apply to transactions conducted by the credit institution during the period when the State Bank of Vietnam applies special control measures or measures for recovery of solvency under the supervision of the State Bank of Vietnam.

5. The credit institution must repay special loans in accordance with the law on credit institutions before the distribution of assets as prescribed in clause 6 of this Article.

6. The value of assets owned by the credit institution shall be distributed in the following order:

a) Bankruptcy cost;

b) Unpaid salaries, unpaid premiums of compulsory social insurance, unemployment insurance, health insurance, and occupational accident and disease insurance, severance allowances and other benefits of employees according to the collective bargaining agreement and the signed labor contracts;

c) Deposits after deduction of the amounts already paid to depositors by the deposit insurer; the amounts paid by the deposit insurer to depositors at the bankrupt credit institution in accordance with the law on deposit insurance and guidelines given by the State Bank of Vietnam; unpaid deposit insurance premiums; and late payments for deposit insurance premiums;

d) Financial obligations to the State; unsecured debts payable to the creditor in the list of creditors; secured debts that remain unpaid since the collateral value is insufficient to cover the debts.

7. In case the remaining value of assets owned by the credit institution, after the full payment of all debts as prescribed in clause 6 of this Article, is still available, the remainder will belong to:

a) Members of the credit institution that is cooperative;

b) The owner of the credit institution that is a single-member limited liability company;

c) Capital contributor to the credit institution that is a limited liability company with two or more members; shareholders of the credit institution that is a joint-stock company.

8. In case the asset value is insufficient for the payment as prescribed in clause 6 of this Article, the payees in the same group of priority shall be paid in percent in proportion to the debt.

9. Within 30 days from the date on which the asset management officer or asset management and liquidation enterprise completely compiles the list of creditors, the list of debtors, and the inventory of assets owned by the credit institution, the Court shall issue a decision to declare the credit institution bankrupt.

10. Within 10 days from the date of receipt of the decision to declare the credit institution bankrupt, the owner of assets entrusted to the credit institution, transferred to the credit institution for safekeeping, or assigned to the credit institution for management under an entrustment, safekeeping or management contract, shall present documents proving the ownership and relevant documents to the civil judgment-enforcing agency to receive back their assets.

11. The Supreme People’s Court shall elaborate and provide guidance on this Article.

Chapter V

REQUEST FOR FOREIGN COURTS’/AGENCIES’ ASSISTANCE IN REHABILITATION/BANKRUPTCY CASES; ASSISTANCE IN FOREIGN REHABILITATION/BANKRUPTCY CASES; RECOGNITION AND PERMISSION FOR ENFORCEMENT OF FOREIGN COURTS’/AGENCIES’ JUDGEMENTS/DECISIONS ON REHABILITATION/BANKRUPTCY

Article 73. Requesting foreign competent Courts/agencies to provide assistance for rehabilitation/bankruptcy cases

1. During the process of settlement of a rehabilitation/bankruptcy case, a Vietnamese Court may request a foreign competent Court/agency to provide assistance in the following cases:

a) Verifying and inventorying assets owned by the enterprise/cooperative;

b) Determining the value of assets owned by the enterprise/cooperative;

c) Liquidating and recovering assets owned by the enterprise/cooperative;

d) Requesting overseas debtors to repay debts to the enterprise/cooperative;

dd) Other necessary requests during the settlement of rehabilitation/bankruptcy case.

2. Procedures for requesting foreign competent Courts or agencies to assist in settling rehabilitation or bankruptcy cases shall be followed in accordance with the laws of the requested country, international treaties to which the Socialist Republic of Vietnam is a signatory, and Vietnamese law.”

3. During the settlement of the rehabilitation/bankruptcy case, the Vietnamese Court may issue a decision to appoint an asset management officer, an asset management and liquidation enterprise, or a legal representative of the enterprise/cooperative to act as a representative of the Vietnamese rehabilitation or bankruptcy case in a foreign country to implement procedures related to such case.

4. The representative of the Vietnamese rehabilitation/bankruptcy case in the foreign country has the following tasks and powers:

a) Request the foreign competent Court/agency to assist in settling the rehabilitation/bankruptcy case currently being settled by the Vietnamese Court; receive and conduct operations assisted by the foreign competent Court/agency;

b) Request the foreign competent Court/agency to recognize and permit enforcement of decisions on rehabilitation/bankruptcy issued by the Vietnamese Court.

5. Scope of tasks and powers of the representative of the Vietnamese rehabilitation/bankruptcy case in the foreign country shall be decided by the Vietnamese Court on a case-by-case basis.

Article 74. Assistance for foreign rehabilitation/bankruptcy cases

1. The Vietnamese Court shall assist in a foreign rehabilitation/bankruptcy case in the following cases:

a) The foreign competent Court/agency requests the Vietnamese Court to assist in settling the foreign rehabilitation/bankruptcy case;

b) The representative of foreign rehabilitation/bankruptcy case, who is appointed by the foreign competent Court/agency, requests the Vietnamese Court to assist in recognizing the right to represent the creditor/debtor to request or participate in the rehabilitation/bankruptcy case settled by the Vietnamese Court.

2. The foreign competent Court/agency or the representative of foreign rehabilitation/bankruptcy case that requests assistance in accordance with clause 1 of this Article shall submit a written request enclosed with documents and pay assistance fee and costs to the Vietnamese competent Court according to Vietnamese law.

3. At the request of the foreign competent Court/agency or the representative of foreign rehabilitation/bankruptcy case, after considering the legitimate rights and interests of the creditor, the enterprise, the cooperative, the person with related rights and obligations, the Vietnamese Court shall consider deciding to conduct one of the following operations:

a) Verifying and inventorying assets owned by the enterprise/cooperative;

b) Determining of value of assets owned by the enterprise/cooperative;

c) Liquidating and recovering assets owned by the enterprise/cooperative;

d) Requesting debtors in Vietnam to repay debts to the enterprise/cooperative;

dd) Other necessary requests during the settlement of rehabilitation/bankruptcy case.

4. The Vietnamese Court shall refuse the request for assistance as prescribed in clause 1 of this Article if such request falls into one of the following cases:

a) The request for assistance is contrary to fundamental principles of Vietnamese law; is inconsistent with international treaties to which the Socialist Republic of Vietnam is a signatory; prejudices the sovereignty or national security of Vietnam, public interests, or State interests; or affects the legitimate rights and interests of the creditor within the territory of Vietnam;

b) Documents are not fully submitted as requested by the Court, or submitted documents are insufficient to verify that the request for assistance is lawful;

c) The requester for assistance fails to pay fees or advance the costs to the Court as prescribed by law;

d) Other cases prescribed by law.

5. The asset management officer, the asset management and liquidation enterprise, enforcer, and other competent persons may provide assistance in accordance with regulations of Vietnamese law.

Article 75. Recognition and permission for enforcement of foreign competent Courts’/agencies’ judgments/decisions on rehabilitation/bankruptcy

1. A judgment/decision on rehabilitation/bankruptcy issued by a foreign competent Court/authority and recognized and permitted to be enforced in Vietnam is judgment/decision legally effective and involved in the assets owned by an individual or organization within the territory of Vietnam, unless otherwise provided for by international treaties to which the Socialist Republic of Vietnam is a signatory.

2. The representative of the foreign rehabilitation/bankruptcy case is entitled to request the Vietnamese Court to recognize and permit the enforcement in Vietnam of any judgment or decision on rehabilitation/bankruptcy, provided that the judgment debtor that is an individual resides or works in Vietnam, or the judgment debtor that is an agency/organization has its head office located in Vietnam, or has assets related to the enforcement of such judgment or decision in Vietnam at the time of the request.

The requester for the recognition and permission for enforcement of the judgment/decision on rehabilitation/bankruptcy, issued by the foreign competent Court/agency must pay fees for the request for recognition and permission for enforcement of the judgment/decision in accordance with regulations of law.

3. The Vietnamese Court shall refuse the request for recognition and permission for enforcement of the judgment/decision on rehabilitation/bankruptcy, issued by the foreign competent Court/agency if such request falls into one of the following cases

a) Recognition and permission for enforcement of the judgment/decision are contrary to fundamental principles of Vietnamese law; are inconsistent with international treaties to which the Socialist Republic of Vietnam is a signatory; prejudice the sovereignty or national security of Vietnam, public interests, or State interests; or affect the legitimate rights and interests of the creditor within the territory of Vietnam;

b) The judgment debtor was not fully and promptly notified of the rehabilitation/bankruptcy case, unless the judgment debtor knew the case and did not object in accordance with the laws of the country where the judgment//decision was issued;

c) A legally effective judgment/decision has been issued by a Vietnamese Court; or the Vietnamese Court has accepted and is settling the rehabilitation/bankruptcy case before a foreign adjudication body accepts the case; or a judgment/decision issued by a Court or a competent authority of a third country has been recognized and enforced by the Vietnamese Court.

d) The judgment/decision fails to satisfy the conditions stipulated in clauses 1 and 2 of this Article, or regulations of international treaties to which the Socialist Republic of Vietnam is a signatory;

dd) The judgment/decision seriously infringes upon the rights of the creditor, debtor, and the person with related rights and interests during the settlement of the rehabilitation/bankruptcy case;

e) The judgment/decision is currently being reviewed in the country where it is issued, or the time limit for request for a review according to normal procedures in such country has not yet expired;

g) The judgment/decision has not yet become legally effective, or has been annulled or terminated in the country where the judgment/decision was issued;

h) The statute of limitation for enforcement of the judgment has expired in accordance with Vietnamese law;

i) Other cases prescribed by law.

4. The requester and the judgment debtor are entitled to submit a written request, and the People’s Procuracy is entitled to protest against the Court’s decision on recognition and permission for enforcement of the foreign competent Court’s/agency’s judgment/decision on rehabilitation/bankruptcy, to ask the competent provincial People’s Court to review it in accordance with this Law. The decision issued by the provincial People’s Court shall be final decision.

5. Recognition and permission for enforcement of the judgment/decision on rehabilitation/bankruptcy, issued by the foreign competent Court/agency shall comply with regulations in this Chapter. In case this Chapter does not provide specific regulations, regulations of the civil procedure law and the law on mutual legal assistance in civil matters shall apply.

Chapter VI

ENFORCEMENT OF DECISIONS TO DECLARE ENTERPRISES AND COOPERATIVES BANKRUPT

Article 76. Jurisdiction and procedures for enforcement of decisions to declare enterprises and cooperatives bankrupt

1. Jurisdiction and procedures for enforcement of decisions to declare enterprises/cooperatives bankrupt shall comply with regulations in this Chapter. In case this Chapter does not provide specific regulations, regulations of the law on enforcement of civil judgments shall apply.

2. Within 03 working days from the date of receipt of the decision to declare the enterprise/cooperative bankrupt, the civil judgment-enforcing agency shall be responsible for proactively issuing an enforcement decision and assign an enforcer to enforce the decision.

3. After the enforcer is assigned by the head of the civil judgment-enforcing agency, he/she shall perform the following tasks:

a) Within 02 working days from the date of assignment, the enforcer shall send a written request to the asset management officer, the asset management and liquidation enterprise for organization of enforcement of the decision to declare the enterprise/cooperative bankrupt.

The written request must be sent to the Court, the Procuracy, and participants in bankruptcy procedures;

b) Follow procedures for opening a bank account in the name of the civil judgment-enforcing agency having the jurisdiction to enforce the decision to declare the enterprise/cooperative bankrupt to deposit the amounts recovered from the bankrupt enterprise/cooperative;

c) Supervise the asset management officer’s/the asset management and liquidation enterprise’s enforcement of the decision to declare the enterprise/cooperative bankrupt;

d) Apply coercive measures to recover and hand over assets in accordance with clause 4 of this Article.” Coercive procedures shall be followed in accordance with the law on enforcement of civil judgments.

4. In case the implementation of coercive measures is deemed necessary, the asset management officer or the asset management and liquidation enterprise shall request the civil judgment-enforcing agency to implement such coercive measures to recover and hand over assets in accordance with the law on enforcement of civil judgments.

5. The Government shall elaborate this Article.

Article 77. Determination of prices and sale of assets

1. Within 10 days from the date of receipt of the written request for organization of enforcement of the decision to declare the enterprise/cooperative bankrupt, the asset management officer, the asset management and liquidation enterprise shall organize the determination of prices of the assets as per law.

2. The assets shall be sold in the following forms:

a) By auction;

b) Without auction.

3. The asset management officer, the asset management and liquidation enterprise shall determine the value of the assets and sell them without the auction as per law. To be specific:

a) Assets at risk of being destroyed;

b) Assets significantly devalued or assets whose value is small;

c) Assets whose preservation, storage and safekeeping costs exceed their value.

4. The asset price shall be re-determined when any violation against regulations in clauses 1 and 3 of this Article is detected, resulting in an inaccurate result of the determination of price.

5. The Judge shall decide to re-determine the price of the asset in case of sale of the asset as prescribed in clause 5, Article 20 of this Law. The enforcer shall decide to re-determine the price of the asset in case of enforcement of the decision on declaration of bankruptcy.

6. In case an asset is determined that it has no value or cannot be sold in accordance with this Article, the asset management officer shall request the Judge to determine such asset is no longer the asset owned by the bankrupt enterprise/cooperative.

7. The Government shall elaborate this Article.

Article 78. Recovery of assets in case of violation

The asset management officer, the asset management and liquidation enterprise, the enforcer shall request the Court to issue a decision to recover assets owned by the enterprise/cooperative due to implementation of transactions null and void as prescribed in Article 49 of this Law. The assets shall be recovered in accordance with the law on enforcement of civil judgments.

Article 79. Return of assets leased/borrowed when enterprises/cooperatives are declared bankrupt

1. Within 10 days from the date of receipt of the decision to declare the enterprise/cooperative bankrupt, the owner of asset leased/borrowed by the enterprise/cooperative for its business operations must present documents proving the ownership and a lease/borrowing contract to the civil judgment-enforcing agency in order to receive back their asset.

2. In case the enterprise/cooperative declared bankrupt has prepaid the rent but the lease term has not yet expired, the lessor may only receive back the asset after refunding the rent for the remaining lease term to the civil judgment-enforcing agency, for aggregation with the assets owned by the enterprise/cooperative.

3. In case the enterprise/cooperative declared bankrupt has transferred the leased/borrowed asset to another person and such asset cannot be recovered, the lessor or lender is entitled to claim compensation for the asset as an unsecured debt.

Article 80. Handling assets owned by enterprises/cooperatives after decisions to declare enterprises/cooperatives bankrupt are issued

1. After the decision to declare the enterprise/cooperative bankrupt is issued and before the enforcement of the decision is completed, if a transaction null and void is detected, the asset management officer or the asset management and liquidation enterprise is entitled to request the Court to declare the transaction null and void, handle legal consequences thereof, and distribute the asset owned by the enterprise/cooperative in accordance with Article 46 of this Law.

2. After the decision to declare the enterprise/cooperative bankrupt is issued and before the enforcement of the decision is completed, if the enterprise’s/cooperative’s asset has not yet been distributed, the Court that has declared the bankruptcy shall consider deciding to distribute the asset in accordance with Article 46 of this Law.

3. The civil judgment-enforcing agency shall abide by the Court’s decision to distribute the asset as per law.

Article 81. Settlement of issues arising after decisions to declare enterprises/cooperatives bankrupt are issued

1. After the Court has issued the decision to declare the enterprise/cooperative bankrupt, if the creditor submits a debt claim form to the Court and proves justifiable grounds for failure to submit the debt claim form within the prescribed time limit, the Court shall take actions as follows:

a) In case the asset distribution plan has been fully implemented, the Court shall notify refusal of the creditor’s debt claim form;

b) In case the asset distribution plan has not been fully implemented, the Court shall decide to revise the asset distribution plan.

2. During the liquidation of assets in accordance with the decision to declare the enterprise/cooperative bankrupt, if any dispute arises or the decision is unenforceable, the enforcer, the asset management officer, the asset management and liquidation enterprise, or participants in bankruptcy procedures shall request the Court to consider settling such issues.

Within 15 days from the date of receipt of the written request from the enforcer, the asset management officer, the asset management and liquidation enterprise, or participants in bankruptcy procedures, the Court shall consider settling the disputes and issuing one of the following decisions:

a) Refuse the request;

b) Accept the request and decide to revise the issued decision.

3. In case the asset management officer, the enforcer, the asset management and liquidation enterprise, or participants in bankruptcy procedures fail to consent to the written response as prescribed in point a, clause 2 of this Article, they are entitled to request the Procuracy to consider lodging protest.

4. The asset management officer or the asset management and liquidation enterprise that is representative of the enterprise/cooperative shall participate in settlement of disputes.

Article 82. Completion of enforcement of decisions to declare enterprises/cooperatives bankrupt

1. The enforcement of the decision to declare the enterprise/cooperative bankrupt is completed in one of the following cases:

a) The enterprise/cooperative declared bankrupt does not have assets for liquidation/distribution;

b) The assets owned by the enterprise/cooperative declared bankrupt have been completely distributed.

2. If the debtor is incapable of execution of the decision within 02 years from the date on which the civil judgment-enforcing agency issues a decision on incapability for execution, such agency shall issue a decision on completion of the enforcement of the decision to declare bankruptcy.

3. Within 03 working days from the date of completion of the enforcement, the head of civil judgment-enforcing agency shall issue a decision on completion of the enforcement. This decision must be sent to the Court that has implemented bankruptcy procedures and publicly announced in accordance with the law.

Chapter VII

RESPONSIBILITIES OF RELEVANT PARTIES, IMPOSITION OF PENALTIES FOR VIOLATIONS AND RESOLUTION OF COMPLAINTS AND DENUNCIATIONS

Article 83. Responsibilities for violations against laws on liquidation/bankruptcy cases

1. Any agency, organization or individual committing a violation against law during settlement of a liquidation/bankruptcy case shall, depending on the nature and severity of the violation, be disciplined, face an administrative penalty or criminal prosecution; if any damage is caused, compensation must be paid in accordance with the law.

2. The Government shall elaborate administrative violations and imposition of administrative penalties for violations against regulations on rehabilitation and bankruptcy.

Article 84. Prohibition of holding positions after enterprises/cooperatives are declared bankrupt

1. A person holding the position of President, General Director, Director, or member of the Board of Members of a wholly state-owned enterprise declared bankrupt, is prohibited from holding such position in any state-owned enterprise within 03 years from the date on which the Court issues the decision to declare bankruptcy.

2. The representative of state capital in a state-invested enterprise declared bankrupt is prohibited from holding the management position in any state-invested enterprise within 03 years from the date on which the Court issues the decision to declare bankruptcy.

3. If the person holding the management position in an enterprise/cooperative declared bankrupt intentionally violates regulations of clause 1, Article 13; clause 1, Article 31; clause 5, Article 38; or clause 2, Article 42 of this Law, the Judge shall consider deciding that the person is prohibited from establishing an enterprise/cooperative, or acting as a manager of an enterprise/cooperative within 03 years from the date on which the Court issues the decision to declare bankruptcy.

4. Regulations in clauses 1, 2 and 3 of this Article shall not apply to the following cases:

a) The enterprise/cooperative is declared bankrupt due to objective obstacles or force majeure;

b) The enterprise is bankrupt but the bankruptcy is not caused by the management, operation or control by the person holding the position of President, General Director, Director, or member of the Board of Members of the wholly state-owned enterprise; or by the appointed representative of state capital in the state-invested enterprise.

Article 85. Resolution of complaints about and denunciations of bankruptcy/rehabilitation cases

1. Agencies, organizations or individuals are entitled to complain about and denounce decisions or acts during liquidation/bankruptcy cases issued/committed by persons implementing bankruptcy and rehabilitation procedures when there are grounds to confirm that such decisions or acts are illegal or infringe upon their legitimate rights and interests.

2. Complaints about and denunciations of decisions/acts issued/committed by persons implementing bankruptcy and rehabilitation procedures shall be resolved in accordance with regulations of the civil procedure law. Complaints about and denunciations of decisions or acts issued/committed by enforcers or heads of civil judgment-enforcing agencies shall be resolved in accordance with regulations of the law on enforcement of civil judgments.

Chapter VIII

IMPLEMENTATION PROVISIONS

Article 86. Amendments to some articles, clauses and points of relevant laws and resolutions

1. Point g, clause 1, Article 214 of the Civil Procedure Code No. 92/2015/QH13, amended by the Code No. 45/2019/QH14, Law No. 59/2020/QH14, Law No. 13/2022/QH15, Law No. 19/2023/QH15, Law No. 34/2024/QH15, Law No. 46/2024/QH15, and Law No. 85/2025/QH15 shall be amended as follows:

“g) The case is mentioned in the law on bankruptcy and rehabilitation;”.

2. Point a, clause 1, Article 37 of the Law on Social Insurance No. 41/2024/QH15 amended by the Law No. 73/2025/QH14, Law No. 84/2025/QH15, and Law No. 113/2025/QH15 shall be amended as follows:

“a) In case a struggling employer has to suspend their production or business activities, making them and their employees unable to pay social insurance premiums, or the employer is entitled to apply rehabilitation procedures in accordance with the law on bankruptcy and rehabilitation, the payment to the pension and survivorship fund may be suspended for up to 12 months;”.

3. Point c, clause 2, Article 4 of the Law on Organization of People’s Courts No. 34/2024/QH15 amended by the Law No. 81/2025/QH15 and the Law No. 116/2025/QH15 shall be amended as follows:

“c) The National Assembly Standing Committee has jurisdiction to promulgate regulations on the scope of territorial jurisdiction of some regional People’s Courts to settle bankruptcy/rehabilitation cases; business, commerce and civil cases and administrative lawsuits over intellectual property and technology transfer at the request of the Chief Justice of the Supreme People’s Court;”.

4. Section 6.4.I.B, Appendix 01, the List of Fees and Charges issued together with the Law on Fees and Charges No. 97/2015/QH13, amended by Law No. 09/2017/QH14, Law No. 23/2018/QH14, Law No. 72/2020/QH14, Law No. 16/2023/QH15, Law No. 20/2023/QH15, Law No. 24/2023/QH15, Law No. 33/2024/QH15, Law No. 35/2024/QH15, Law No. 47/2024/QH15, Law No. 60/2024/QH15, Law No. 74/2025/QH15, Law No. 89/2025/QH15, Law No. 94/2025/QH15, Law No. 95/2025/QH15, Law No. 116/2025/QH15, Law No. 118/2025/QH15, and Law No. 130/2025/QH15 shall be amended as follows:

5. The phrase “áp dụng Luật Phá sản” (application of the Law on Bankruptcy) shall be replaced by the phrase “áp dụng Luật Phục hồi, phá sản” (application of the Law on Bankruptcy and Rehabilitation); the phrase “pháp luật về phá sản” (the bankruptcy law) shall be replaced by the phrase “pháp luật về phục hồi, phá sản” (the law on rehabilitation and bankruptcy); the phrase “Tòa Phá sản” (Bankruptcy Court) shall be replaced by the phrase “Tòa Phục hồi, phá sản” (Bankruptcy and Rehabilitation Court); the phrase “vụ việc phá sản” (bankruptcy case) shall be replaced by the phrase “vụ việc phục hồi, phá sản” (bankruptcy and rehabilitation case) in laws and resolutions issued by the National Assembly before the effective date of this Law.

Article 87. Effect

1. This Law comes into force from March 01, 2026, except for regulations in clause 3 Article 38 of this Law that come into force from July 01, 2026.

2. The Law on Bankruptcy No. 51/2014/QH13 amended by the Law No. 85/2025/QH15 shall cease to be effective from the effective date of this Law, except for the cases specified in points a and b clause 1 Article 88 of this Law.

Article 88. Transitional provisions

1. Regarding any bankruptcy case that has been accepted by the Court before the effective date of this Law but has not completely been settled, regulations of this Law shall apply for further settlement, except for the following cases:

a) The civil judgment-enforcing agency is currently organizing the enforcement of the decision to declare the enterprise/cooperative bankrupt before the effective date of this Law but such enforcement has not yet been completed, the decision shall continue to be enforced in accordance with regulations of the Law on Bankruptcy No. 51/2014/QH13;

b) If any request for or protest against the decision to declare the enterprise/cooperative bankrupt as prescribed in Article 113 of the Law on Bankruptcy No. 51/2014/QH13 has not completely been processed or implemented by the effective date of this Law, such request/protest shall be processed or implemented in accordance with regulations of the Law on Bankruptcy No. 51/2014/QH13.

2. Rehabilitation fees, fees for requests for assistance in foreign bankruptcy cases, fees for requests for recognition and enforcement of judgments or decisions on bankruptcy/rehabilitation issued by foreign Courts or competent authorities shall be equal to bankruptcy fees until the National Assembly Standing Committee issues further regulations.

3. The Supreme People’s Court shall elaborate and provide guidance on clause 1 of this Article.

This Law was passed by the 15^th National Assembly of the Socialist Republic of Vietnam during its 10^th session on December 11^th 2025.